FAC1502 Property plant and equipment PPE Property plant and equipment to be classified as an asset not necessary to be the legal owner asset obtained on credit and lease provided the liability is recorded ID: 763363
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FAC1502 Property, plant and equipment (PPE)
Property, plant and equipment:to be classified as an asset - not necessary to be the legal owner asset obtained on credit and lease - provided the liability is recorded have an lifespan of more than one year - be used over and over tangible assets – buildings, machinery, vehicles and furniture see and touch become obsolete – written off over expected economic life no longer operate economically – replaced
Property, plant and equipment:Tangible assets: buildings, machinery, vehicles and furniture Intangible assets: IAS 38 (AC 129 .2) defines intangible assets as ``... identifiable, non-monetary assets without physical substance held for use in the production or supply of goods or services, … '' Rights eg . copy rights, patents, goodwill Deferred expenses eg . company incorporation costs Financial assets: eg . long term invested bursary funds.
Property, plant and equipment:the cost price of PPE consists of: purchase price , including all expenses incurred installation costs includingany other expenses in getting the asset operationalcost price - remain constant throughout the life of the assetfinancing costs on loans raised are not included Determination of the cost price of PPE
Property, plant and equipment:assets are acquired to generate income because income is generated cost can be written off depreciation is allocation of over its useful life method decided on must represent a fair allocation of cost The concept of depreciation
Property, plant and equipment:during expected life a fair amount must be written under double-entry system , another account has to be crediteddifference between asset account and the accumulated depreciation account is the net carrying amount of the asset Recording depreciation
Property, plant and equipment:Straight line method Cost price is written of over the expected useful life (in years) of the asset. Diminishing balance method In this case a fixed percentage of the carrying amount is written off annually. Production unit methodIn this case the units produced by the machine are written off annually as a percentage of the units the machine is expected to produce over its total life span. Methods of calculating depreciation
Property, plant and equipment:Bilgredon bought a machine on 1 June 20.0 for R500 000 with a discount of R60 000, transport costs of R15 000 and installation costs of R5 000. Thus the depreciable cost price is? R460 000 (500 000 - 60 000 + 15 000 + 5 000) The estimated lifespan is 5 years. Bilgredon's financial year ends on 31 May.
Property, plant and equipment: Straight line method – depreciation schedule
Property, plant and equipment: Straight line method
Property, plant and equipment: Straight line method – depreciation schedule
Property, plant and equipment: General ledger Dr Machinery (at CP ) Cr 20.1 Jun 1 Bank R 460 000 20.1 R Dr Depreciation on Machinery Cr 20.1 May 31 Accumulated depr R 92 000 20.1 May 31 Profit or loss R Dr Accumulated depreciation: Machinery Cr 20.1 May 31 R 20.1 May 31 Depreciation R92 000 Dr Profit or loss Cr 20.1May 31 Depreciation R 20.1May 31 R
Property, plant and equipment: GENERAL JOURNAL ENTRIES - FOR THE 5 YEARS The depreciable amount is the cost of the asset less its residual value . The residual value is the expected value (eg scrap value, trade-in value) of the asset at the end of its useful life.
Property, plant and equipment: General ledger Dr Machinery (at CP) Cr 20.1 Jun 1 Bank R 460 000 20.1 R Dr Depreciation on Machinery Cr 20.1 May 31 Accumulated depr R 92 000 20.1 May 31 Profit or loss R 92 000 Dr Accumulated depreciation: Machinery Cr 20.1 May 31 R 20.1 May 31 Depreciation R 92 000 Dr Profit or loss Cr 20.1May 31 Depreciation R92 000 20.1May 31 R
Property, plant and equipment: JOURNAL ENTRIES - FOR THE 5 YEARS GENERAL JOURNAL The depreciable amount is the cost of the asset less its residual value . The residual value is the expected value (eg scrap value, trade-in value) of the asset at the end of its useful life.
Note on PPE Property, plant and equipment:
Property, plant and equipment: Straight line method – depreciation schedule
Note on PPE Property, plant and equipment:
Property, plant and equipment: Statement of Financial Position Only the carrying amount is shown on the face of the statement of financial position. A detailed reconciliation of movements in the carrying amount from the beginning to the end of the financial period is shown in a note .
Diminishing balance method The carrying amount at the end of the fifth year (R150 733) is deemed to be the disposal (scrap) value of the asset. According to this method the carrying amount will, mathematically, never become nil. 460 000 -92 000
Diminishing balance method The carrying amount at the end of the fifth year (R150 733) is deemed to be the disposal (scrap) value of the asset. According to this method the carrying amount will, mathematically, never become nil.
Property, plant and equipment: Diminishing balance method
Production unit methodProduction for:year 1 = 500 units, year 2 = 550 units, year 3 = 300 units, year 4 = 200 units and year 5 = 450 units. The total number of units expected to be produced by the machine = 2 000 units.
Production unit method
Production unit method
Property, plant and equipment: Production volume method
Acquisition of PPE during the yearSuppose a machine is purchased six months before the end of the year. The provision for depreciation for the first year must be determined for the portion of the year, which in this case is (6 ÷ 12) or 50%. Example: If the cost price of the machine, bought 6 months before the year end, is R460 000 and the depreciation rate is 20% per year, the depreciation to be provided for the first year will be:
Acquisition of PPE during the yearSuppose a machine is purchased six months before the end of the year. The provision for depreciation for the first year must be determined for the portion of the year, which in this case is (6 ÷ 12) or 50%. Example: If the cost price of the machine, bought 6 months before the year end, is R460 000 and the depreciation rate is 20% per year, the depreciation to be provided for the first year will be:
Depreciation for months in current year29 1 2 3 4 5 6 7 8 9 10 11 12 1 End of previous financial year Financial year Date of machine bought Depreciation =(6 ÷ 12) or 50%
Acquisition of PPE during the yearSuppose a machine is purchased six months before the end of the year. The provision for depreciation for the first year must be determined for the portion of the year, which in this case is (6 ÷ 12) or 50%. Example: If the cost price of the machine, bought 6 months before the year end, is R460 000 and the depreciation rate is 20% per year, the depreciation to be provided for the first year will be:
Acquisition of PPE during the yearSuppose a machine is purchased six months before the end of the year. The provision for depreciation for the first year must be determined for the portion of the year, which in this case is (6 ÷ 12) or 50%. Example: If the cost price of the machine, bought 6 months before the year end, is R460 000 and the depreciation rate is 20% per year, the depreciation to be provided for the first year will be: R460 000 X 20% X 50% = R46 000.
Disposal of PPE Scrapping an asset (at the end of the financial year) which has not been written off (depreciated) entirely. Bilgredon bought a machine costing R460 000 on 30 November 20.0. They decided to scrap the machine at the year ended 31 May 20.5 when the accumulated depreciation amounted to R402 500.
Disposal of PPE – SG Exercise 12.3, p249Scrapping an asset (at the end of the financial year) which has not been written off (depreciated) entirely. Bilgredon bought a machine costing R460 000 on 30 November 20.0. They decided to scrap the machine at the year ended 31 May 20.5 when the accumulated depreciation amounted to R402 500.
Property, plant and equipment: General ledger Dr Machinery (at CP ) Cr 20.0 Nov 30 Bank R 460 000 20.5 May 31 Realisation of mach R 460 000 Dr Realisation of machinery Cr 20.5 May 31 Machinery at cost R 460 000 R
Disposal of PPE Profits and losses on disposal of assets must be disclosed separately in the statement of profit or loss and comprehensive income. General journal
Note on PPE
Disposal of PPE – SG Exercise 12.3, p249Scrapping an asset (at the end of the financial year) which has not been written off (depreciated) entirely. Bilgredon bought a machine costing R460 000 on 30 November 20.0. They decided to scrap the machine at the year ended 31 May 20.5 when the accumulated depreciation amounted to R402 500.
Property, plant and equipment: General ledger Dr Accumulated depreciation: Machinery Cr 20.5 May 31 Realisation of mach R 402 500 402 500 20.1 May 31 20.2 May 31 20.3 May 31 20.4 May 31 20.5 May 31 Depreciation Depreciation Depreciation Depreciation Depreciation R 57 500 126 500 69 000 46 000 103 500 402 500 Dr Realisation of machinery Cr 20.5 May 31 Machinery at cost R460 000 20.2May 31 Accumulated depR402 500
Disposal of PPE Profits and losses on disposal of assets must be disclosed separately in the statement of profit or loss and other comprehensive income. General journal
Note on PPE
Property, plant and equipment: General ledger Dr Realisation of machinery Cr 20.5 May 31 Machinery at cost R 460 000 460 000 20.5 May 31 Accumulated depr Loss on disposal of machinery R 402 500 57 500 460 000 Dr Loss on disposal of machinery Cr 20.5 May 31 Realisation of mach R 57 500 R
Disposal of PPE Profits and losses on disposal of assets must be disclosed separately in the statement of profit or loss and other comprehensive income. General journal
Note on PPE
Trade-in an asset A new machine (ACN) is purchased for R20 000. An old machine (CNA), which cost R10 000 and on which depreciation amounting to R8 000 has been provided for, is traded in on the new machine. A trade-in value of R2 500 is received and the balance of the purchase price of the new machine is paid in cash. Require:Journal entries Ledger accounts. Property, plant and equipment:
Trade-in an asset A new machine (ACN) is purchased for R20 000. An old machine (CNA), which cost R10 000 and on which depreciation amounting to R8 000 has been provided for, is traded in on the new machine. A trade-in value of R2 500 is received and the balance of the purchase price of the new machine is paid in cash. Require:Journal entries Ledger accounts. Property, plant and equipment:
Ledger accounts Detail Fol R Detail Fol R Creditor b/d 20 000 Dr New Machine ACN Cr Detail Fol R Detail Fol R New machine ACN 20 000 Dr Creditor Cr
A new machine (ACN) is purchased for R20 000. Details Debit R Credit R Machinery CreditorNew machine CAN purchased 20 000 20 000 Property, plant and equipment: General Journal
Trade-in an asset A new machine (ACN) is purchased for R20 000. An old machine (CNA), which cost R10 000 and on which depreciation amounting to R8 000 has been provided for, is traded in on the new machine. A trade-in value of R2 500 is received and the balance of the purchase price of the new machine is paid in cash. Require:Journal entries Ledger accounts. Property, plant and equipment:
Ledger accounts Detail Fol R Detail Fol R Balance b/d 10 000 Machinery realisation 10 000 Dr Machine CAN Cr Detail Fol R Detail Fol R Machinery realisation 8 000 Balance b/d 8 000 Dr Accumulated depreciation: Machine CAN Cr Dr Machinery realisation Cr Detail Fol R Detail Fol R Machine CAN (cost)10 000Accumulated depreciationb/d8 000Profit on sale of non-current asset500Creditor2 50010 50010 500
Property, plant and equipment: Details Debit R Credit R Machinery realisation account Machinery accountTransfer of original cost price of machine sold to the realisation account10 000 10 000 Accumulated depreciation: Machinery Machinery realisation account Transfer of accumulated depreciation on machinery sold to the realisation account 8 000 8 000 An old machine (CNA), which cost R10 000 and on which depreciation amounting to R8 000 has been provided for, is traded in on the new machine. General Journal
Trade-in an asset A new machine (ACN) is purchased for R20 000. An old machine (CNA), which cost R10 000 and on which depreciation amounting to R8 000 has been provided for, is traded in on the new machine. A trade-in value of R2 500 is received and the balance of the purchase price of the new machine is paid in cash. Require:Journal entries Ledger accounts. Property, plant and equipment:
Ledger accounts Detail Fol R Detail Fol R Balance b/d 10 000 Machinery realisation 10 000 Dr Machine CAN Cr Detail Fol R Detail Fol R Machinery realisation 8 000 Balance b/d 8 000 Dr Accumulated depreciation: Machine CAN Cr Dr Machinery realisation Cr Detail Fol R Detail Fol R Machine CAN (cost)10 000Accumulated depreciationb/d8 000Profit on sale of non-current asset500Creditor2 50010 50010 500
Property, plant and equipment: Details Debit R Credit R Machinery realisation account Machinery accountTransfer of orininal cost price of machine sold to the realisation account10 000 10 000 Accumulated depreciation: Machinery Machinery realisation account Transfer of accumulated depreciation on machinery sold to the realisation account 8 000 8 000 An old machine (CNA), which cost R10 000 and on which depreciation amounting to R8 000 has been provided for, is traded in on the new machine. General Journal
Trade-in an asset A new machine (ACN) is purchased for R20 000. An old machine (CNA), which cost R10 000 and on which depreciation amounting to R8 000 has been provided for, is traded in on the new machine. A trade-in value of R2 500 is received and the balance of the purchase price of the new machine is paid in cash. Require:Journal entries Ledger accounts. Property, plant and equipment:
Ledger accounts Detail Fol R Detail Fol R Machinery realisation 2 500 New machine ACN 20 000 Dr Creditor Cr Dr Machinery realisation Cr Detail Fol R Detail Fol R Machine CAN (cost) 10 000 Accumulated depreciation b/d 8 000 Profit on sale of non-current asset 500 Creditor 2 500 10 500 10 500
Property, plant and equipment: Details Debit R Credit R Creditor BankSettlement of purchase price. (Usually in CPJ) 17 500 17 500 Creditor Machinery realisation account Trading-in of CNA machine 2 500 2 500 Machinery realisation account Profit on trade-in of non-current asset Transfer of profit on trade-in of CNA machine 500 500 General Journal
Trade-in an asset A new machine (ACN) is purchased for R20 000. An old machine (CNA), which cost R10 000 and on which depreciation amounting to R8 000 has been provided for, is traded in on the new machine. A trade-in value of R2 500 is received and the balance of the purchase price of the new machine is paid in cash. Require:Journal entries Ledger accounts. Property, plant and equipment:
Ledger accounts Detail Fol R Detail Fol R Machinery realisation 2 500 New Machine ACN 20 000 Bank 17 500 20 000 20 000 Dr Creditor Cr Detail Fol R Detail Fol R Creditor 17 500 Dr Bank Cr Dr Machinery realisation Cr Detail Fol R Detail Fol R Machine CAN (cost)10 000Accumulated depreciationb/d8 000Profit on sale of non-current asset500Creditor2 50010 50010 500
Property, plant and equipment: Details Debit R Credit R Creditor BankSettlement of purchase price. (Usually in CPJ) 17 500 17 500 Creditor Machinery realisation account Trading-in of CNA machine 2 500 2 500 Machinery realisation account Profit on trade-in of non-current asset Transfer of profit on trade-in of CNA machine 500 500 A trade-in value of R2 500 is received and the balance of the purchase price of the new machine is paid in cash. General Journal
Ledger accounts Detail Fol R Detail Fol R Machinery realisation 500 Dr Profit or loss Cr Dr Machinery realisation Cr Detail Fol R Detail Fol R Machine CAN (cost) 10 000 Accumulated depreciation b/d 8 000 Profit on sale of non-current asset 500 Creditor 2 500 10 500 10 500
Property, plant and equipment: Details Debit R Credit R Creditor BankSettlement of purchase price. (Usually in CPJ) 17 500 17 500 Creditor Machinery realisation account Trading-in of CNA machine 2 500 2 500 Machinery realisation account Profit on trade-in of non-current asset Transfer of profit on trade-in of CNA machine 500 500 A trade-in value of R2 500 is received and the balance of the purchase price of the new machine is paid in cash. General Journal
Exercise The following information relates to Bacinis : Balances as at 31 August 20.3: R R Plant and machinery (at cost) 85 000 Accumulated depreciation: Plant and machinery 46 600ADDITIONAL INFORMATIONAccording to the assets register, plant and machinery consist of two Zobo machines of equal value. Both the machines were purchased and installed on the same date. Depreciation is written off at 20% per annum by the diminishing balance method. On 31 January 20.4, management decided to increase production capacity and purchased a Jojo machine on credit from Maxi Limited for R90 000. One of the Zobo machines was traded in, reducing the owing to Maxi Ltd to R70 500. On 1 February 20.4, installation charges on the new machine amounting to R6 000 were paid in cash. Require: Prepare the note regarding property, plant and equipment for the year ended 31 August 20.4 Property, plant and equipment:
Exercise The following information relates to Bacinis : Balances as at 31 August 20.3: R R Plant and machinery (at cost) 85 000Accumulated depreciation: Plant and machinery 46 600ADDITIONAL INFORMATIONAccording to the assets register, plant and machinery consist of two Zobo machines of equal value. Both the machines were purchased and installed on the same date. Depreciation is written off at 20% per annum by the diminishing balance method. On 31 January 20.4, management decided to increase production capacity and purchased a Jojo machine on credit from Maxi Limited for R90 000. One of the Zobo machines was traded in, reducing the owing to Maxi Ltd to R70 500. On 1 February 20.4, installation charges on the new machine amounting to R6 000 were paid in cash. Require: Prepare the note regarding property, plant and equipment for the year ended 31 August 20.4 Property, plant and equipment:
BACINISNOTES FOR THE YEAR ENDED 31 AUGUST 20.4 Property, plant and equipment Machinery Total R R Carrying amount: Beginning of year 38 400 38 400 Cost 85 000 85 000 Accumulated depreciation (46 600) (46 600) Additions (R90 000 + R6 000) 96 000 96 000 Depreciation (R1 600+ R3 840 + R11 200) (16 640) (16 640) Disposals (17 600) (17 600) Cost (42 500) (42 500) Accumulated depreciation 24 900 24 900 Carrying amount: End of year 100 160 100 160 Cost (R85 000 + R96 000 – R42 500) 138 500 138 500 Accumulated depreciation (R46 600 + R16 640 – R24 900) (38 340) (38 340)
Depreciation Current financial year Fin yr end Begin of fin yr Previous financial years Acc depreciation R46 600/2 = R23 300 31 Aug 20.3 31 Jan 20.4 31 Aug 20.2 31 Aug 20.1 31 Aug 20.4 Cost R85 000/2 = R42 500
Exercise The following information relates to Bacinis : Balances as at 31 August 20.3: R R Plant and machinery (at cost) 85 000 Accumulated depreciation: Plant and machinery 46 600ADDITIONAL INFORMATIONAccording to the assets register, plant and machinery consist of two Zobo machines of equal value. Both the machines were purchased and installed on the same date. Depreciation is written off at 20% per annum by the diminishing balance method. On 31 January 20.4, management decided to increase production capacity and purchased a Jojo machine on credit from Maxi Limited for R90 000. One of the Zobo machines was traded in, reducing the owing to Maxi Ltd to R70 500. On 1 February 20.4, installation charges on the new machine amounting to R6 000 were paid in cash. Require: Prepare the note regarding property, plant and equipment for the year ended 31 August 20.4 Property, plant and equipment:
Depreciation Current financial year Fin yr end Cost R85 000/2 = R42 500 Begin of fin yr Previous financial years Acc depreciation R46 600/2 = R23 300 31 Aug 20.3 31 Jan 20.4 31 Aug 20.2 31 Aug 20.1 31 Aug 20.4 Cost R85 000/2 = R42 500
BACINISNOTES FOR THE YEAR ENDED 31 AUGUST 20.4 Property, plant and equipment Machinery Total R R Carrying amount: Beginning of year 38 400 38 400 Cost 85 000 85 000 Accumulated depreciation (46 600) (46 600) Additions (R90 000 + R6 000) 96 000 96 000 Depreciation (R1 600+ R3 840 + R11 200) (16 640) (16 640) Disposals (17 600) (17 600) Cost (42 500) (42 500) Accumulated depreciation (R23 300 + R1 600) 24 900 24 900 Carrying amount: End of year 100 160 100 160 Cost (R85 000 + R96 000 – R42 500) 138 500 138 500 Accumulated depreciation (R46 600 + R16 640 – R24 900) (38 340) (38 340)
Depreciation Current financial year Fin yr end Cost R85 000/2 = R42 500 Begin of fin yr Previous financial years Acc depreciation R46 600/2 = R23 300 31 Aug 20.3 31 Jan 20.4 31 Aug 20.2 31 Aug 20.1 31 Aug 20.4 Cost R85 000/2 = R42 500 Cost R96 000
BACINISNOTES FOR THE YEAR ENDED 31 AUGUST 20.4 Property, plant and equipment Machinery Total R R Carrying amount: Beginning of year 38 400 38 400 Cost 85 000 85 000 Accumulated depreciation (46 600) (46 600) Additions (R90 000 + R6 000) 96 000 96 000 Depreciation (R1 600+ R3 840 + R11 200) (16 640) (16 640) Disposals (17 600) (17 600) Cost (42 500) (42 500) Accumulated depreciation 24 900 24 900 Carrying amount: End of year 100 160 100 160 Cost (R85 000 + R96 000 – R42 500) 138 500 138 500 Accumulated depreciation (R46 600 + R16 640 – R24 900) (38 340) (38 340)
Exercise The following information relates to Bacinis : Balances as at 31 August 20.3: R R Plant and machinery (at cost) 85 000 Accumulated depreciation: Plant and machinery 46 600ADDITIONAL INFORMATIONAccording to the assets register, plant and machinery consist of two Zobo machines of equal value. Both the machines were purchased and installed on the same date. Depreciation is written off at 20% per annum by the diminishing balance method. On 31 January 20.4, management decided to increase production capacity and purchased a Jojo machine on credit from Maxi Limited for R90 000. One of the Zobo machines was traded in, reducing the owing to Maxi Ltd to R70 500. On 1 February 20.4, installation charges on the new machine amounting to R6 000 were paid in cash. Require: Prepare the note regarding property, plant and equipment for the year ended 31 August 20.4 Property, plant and equipment:
Depreciation Current financial year Fin yr end Cost R85 000/2 = R42 500 Begin of fin yr Previous financial years Acc depreciation R46 600/2 = R23 300 R42 500 – R23 300 = R19 200 x 20% x 5/12 = R1 600 31 Aug 20.3 31 Jan 20.4 31 Aug 20.2 31 Aug 20.1 31 Aug 20.4 Cost R85 000/2 = R42 500 Cost R96 000
BACINISNOTES FOR THE YEAR ENDED 31 AUGUST 20.4 Property, plant and equipment Machinery Total R R Carrying amount: Beginning of year 38 400 38 400 Cost 85 000 85 000 Accumulated depreciation (46 600) (46 600) Additions (R90 000 + R6 000) 96 000 96 000 Depreciation (R1 600 + R3 840 + R11 200) (16 640) (16 640) Disposals (17 600) (17 600) Cost (42 500) (42 500) Accumulated depreciation (R23 300 + R1 600) 24 900 24 900 Carrying amount: End of year 100 160 100 160 Cost (R85 000 + R96 000 – R42 500) 138 500 138 500 Accumulated depreciation (R46 600 + R16 640 – R24 900) (38 340) (38 340)
Exercise The following information relates to Bacinis : Balances as at 31 August 20.3: R R Plant and machinery (at cost) 85 000 Accumulated depreciation: Plant and machinery 46 600ADDITIONAL INFORMATIONAccording to the assets register, plant and machinery consist of two Zobo machines of equal value. Both the machines were purchased and installed on the same date. Depreciation is written off at 20% per annum by the diminishing balance method. On 31 January 20.4, management decided to increase production capacity and purchased a Jojo machine on credit from Maxi Limited for R90 000. One of the Zobo machines was traded in, reducing the owing to Maxi Ltd to R70 500. On 1 February 20.4, installation charges on the new machine amounting to R6 000 were paid in cash. Require: Prepare the note regarding property, plant and equipment for the year ended 31 August 20.4 Property, plant and equipment:
BACINISNOTES FOR THE YEAR ENDED 31 AUGUST 20.4 Property, plant and equipment Machinery Total R R Carrying amount: Beginning of year 38 400 38 400 Cost 85 000 85 000 Accumulated depreciation (46 600) (46 600) Additions (R90 000 + R6 000) 96 000 96 000 Depreciation (R1 600+ R3 840 + R11 200) (16 640) (16 640) Disposals (17 600) (17 600) Cost (42 500) (42 500) Accumulated depreciation (R23 300 + R1 600) 24 900 24 900 Carrying amount: End of year 100 160 100 160 Cost (R85 000 + R96 000 – R42 500) 138 500 138 500 Accumulated depreciation (R46 600 + R16 640 – R24 900) (38 340) (38 340)
Depreciation Current financial year Fin yr end Cost R85 000/2 = R42 500 Begin of fin yr Previous financial years Acc depreciation R46 600/2 = R23 300 R42 500 – R23 300 = R19 200 x 20% x 5/12 = R1 600 31 Aug 20.3 31 Jan 20.4 31 Aug 20.2 31 Aug 20.1 31 Aug 20.4 Cost R85 000/2 = R42 500 R19 200 x 20% = R3 840 Cost R96 000
BACINISNOTES FOR THE YEAR ENDED 31 AUGUST 20.4 Property, plant and equipment Machinery Total R R Carrying amount: Beginning of year 38 400 38 400 Cost 85 000 85 000 Accumulated depreciation (46 600) (46 600) Additions (R90 000 + R6 000) 96 000 96 000 Depreciation (R1 600+ R3 840 + R11 200) (16 640) (16 640) Disposals (17 600) (17 600) Cost (42 500) (42 500) Accumulated depreciation 24 900 24 900 Carrying amount: End of year 100 160 100 160 Cost (R85 000 + R96 000 – R42 500) 138 500 138 500 Accumulated depreciation (R46 600 + R16 640 – R24 900) (38 340) (38 340)
Depreciation R96 000 x 20% x 7/12 = R11 200 Current financial year Fin yr end Cost R85 000/2 = R42 500 Begin of fin yr Previous financial years Acc depreciation R46 600/2 = R23 300 R42 500 – R23 300 = R19 200 x 20% x 5/12 = R1 600 31 Aug 20.3 31 Jan 20.4 31 Aug 20.2 31 Aug 20.1 31 Aug 20.4 Cost R85 000/2 = R42 500 R19 200 x 20% = R3 840 Cost R96 000
BACINISNOTES FOR THE YEAR ENDED 31 AUGUST 20.4 Property, plant and equipment Machinery Total R R Carrying amount: Beginning of year 38 400 38 400 Cost 85 000 85 000 Accumulated depreciation (46 600) (46 600) Additions (R90 000 + R6 000) 96 000 96 000 Depreciation (R1 600+ R3 840 + R11 200) (16 640) (16 640) Disposals (17 600) (17 600) Cost (42 500) (42 500) Accumulated depreciation 24 900 24 900 Carrying amount: End of year 100 160 100 160 Cost (R85 000 + R96 000 – R42 500) 138 500 138 500 Accumulated depreciation (R46 600 + R16 640 – R24 900) (38 340) (38 340)
BACINISNOTES FOR THE YEAR ENDED 31 AUGUST 20.4 Property, plant and equipment Machinery Total R R Carrying amount: Beginning of year 38 400 38 400 Cost 85 000 85 000 Accumulated depreciation (46 600) (46 600) Additions (R90 000 + R6 000) 96 000 96 000 Depreciation (R1 600+ R3 840 + R11 200) (16 640) (16 640) Disposals (17 600) (17 600) Cost (42 500) (42 500) Accumulated depreciation 24 900 24 900 Carrying amount: End of year 100 160 100 160 Cost ( R85 000 + R96 000 – R42 500 ) 138 500 138 500 Accumulated depreciation (R46 600 + R16 640 – R24 900) (38 340) (38 340)
BACINISNOTES FOR THE YEAR ENDED 31 AUGUST 20.4 Property, plant and equipment Machinery Total R R Carrying amount: Beginning of year 38 400 38 400 Cost 85 000 85 000 Accumulated depreciation (46 600) (46 600) Additions (R90 000 + R6 000) 96 000 96 000 Depreciation (R1 600+ R3 840 + R11 200) (16 640) (16 640) Disposals (17 600) (17 600) Cost (42 500) (42 500) Accumulated depreciation 24 900 24 900 Carrying amount: End of year 100 160 100 160 Cost (R85 000 + R96 000 – R42 500) 138 500 138 500 Accumulated depreciation ( R46 600 + R16 640 – R24 900 ) (38 340) (38 340)
BACINISNOTES FOR THE YEAR ENDED 31 AUGUST 20.4 Property, plant and equipment Machinery Total R R Carrying amount: Beginning of year 38 400 38 400 Cost 85 000 85 000 Accumulated depreciation (46 600) (46 600) Additions (R90 000 + R6 000) 96 000 96 000 Depreciation (R1 600+ R3 840 + R11 200) (16 640) (16 640) Disposals (17 600) (17 600) Cost (42 500) (42 500) Accumulated depreciation 24 900 24 900 Carrying amount: End of year 100 160 100 160 Cost (R85 000 + R96 000 – R42 500) 138 500 138 500 Accumulated depreciation (R46 600 + R16 640 – R24 900) (38 340) (38 340)