FAC 1502 Property plant and equipment PPE Property
- Slides: 82
FAC 1502 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: Determination of the cost price of PPE �the cost price of PPE consists of: �purchase price, including all expenses incurred �installation costs including �any other expenses in getting the asset operational �cost price - remain constant throughout the life of the asset �financing costs on loans raised are not included
Property, plant and equipment: The concept of depreciation �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
Property, plant and equipment: Recording depreciation �during expected life a fair amount must be written �under double-entry system , another account has to be credited �difference between asset account and the accumulated depreciation account is the net carrying amount of the asset
Property, plant and equipment: Methods of calculating depreciation �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 method �In 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.
Property, plant and equipment: �Bilgredon bought a machine on 1 June 20. 0 for R 500 000 with a discount of R 60 000, transport costs of R 15 000 and installation costs of R 5 000. Thus the depreciable cost price is? R 460 000 (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 600000 500000 400000 300000 Carrying amount Acc depreciation 200000 Depreciation 100000 0 20. 1 year 1 20. 2 year 20. 3 year 20. 4 year 20. 5 year 2 3 4 5
Property, plant and equipment: Straight line method – depreciation schedule
Property, plant and equipment: General ledger Dr 20. 1 Jun 1 Bank Dr 20. 1 May 31 Accumulated depr Dr 20. 1 May 31 Depreciation Machinery (at CP) R 20. 1 460 000 Depreciation on Machinery R 20. 1 92 000 May 31 Profit or loss Accumulated depreciation: Machinery R 20. 1 May 31 Depreciation Profit or loss R 20. 1 May 31 Cr R 92 000 Cr 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 20. 1 Jun 1 Bank Dr 20. 1 May 31 Accumulated depr Dr 20. 1 May 31 Depreciation Machinery (at CP) R 20. 1 460 000 Depreciation on Machinery R 20. 1 92 000 May 31 Profit or loss Accumulated depreciation: Machinery R 20. 1 May 31 Depreciation Profit or loss R 20. 1 92 000 May 31 Cr R 92 000 Cr 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.
Property, plant and equipment: Note on PPE
Property, plant and equipment: Straight line method – depreciation schedule
Property, plant and equipment: Note on PPE
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 460 000 -92 000 The carrying amount at the end of the fifth year (R 150 733) is deemed to be the disposal (scrap) value of the asset. According to this method the carrying amount will, mathematically, never become nil.
Diminishing balance method The carrying amount at the end of the fifth year (R 150 733) 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 600000 500000 400000 300000 Carrying amount Acc depreciation 200000 Depreciation 100000 0 20. 1 year 20. 2 year 20. 3 year 20. 4 year 20. 5 year 1 2 3 4 5
Production unit method �Production 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 600000 500000 400000 300000 Carrying amount Acc depreciation 200000 Depreciation 100000 0 20. 1 year 20. 2 year 20. 3 year 20. 4 year 20. 5 year 1 2 3 4 5
Acquisition of PPE during the year �Suppose 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 R 460 000 and the depreciation rate is 20% per year, the depreciation to be provided for the first year will be:
Acquisition of PPE during the year �Suppose 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 R 460 000 and the depreciation rate is 20% per year, the depreciation to be provided for the first year will be:
Depreciation for months in current year Financial year 1 2 End of previous financial year 3 4 5 6 7 8 9 10 11 12 1 Date of machine bought Depreciation =(6 ÷ 12) or 50% 29
Acquisition of PPE during the year �Suppose 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 R 460 000 and the depreciation rate is 20% per year, the depreciation to be provided for the first year will be:
Acquisition of PPE during the year �Suppose 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 R 460 000 and the depreciation rate is 20% per year, the depreciation to be provided for the first year will be: R 460 000 X 20% X 50% = R 46 000.
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 R 460 000 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 R 402 500.
Disposal of PPE – SG Exercise 12. 3, p 249 Scrapping an asset (at the end of the financial year) which has not been written off (depreciated) entirely. �Bilgredon bought a machine costing R 460 000 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 R 402 500.
Property, plant and equipment: General ledger Dr 20. 0 Nov 30 Bank Dr 20. 5 May 31 Machinery at cost Machinery (at CP) R 20. 5 460 000 May 31 Realisation of machinery R 460 000 Cr R
Disposal of PPE General journal Profits and losses on disposal of assets must be disclosed separately in the statement of profit or loss and comprehensive income.
Note on PPE
Disposal of PPE – SG Exercise 12. 3, p 249 Scrapping an asset (at the end of the financial year) which has not been written off (depreciated) entirely. �Bilgredon bought a machine costing R 460 000 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 R 402 500.
Property, plant and equipment: General ledger Dr 20. 5 May 31 Accumulated depreciation: Machinery R 20. 1 Realisation of mach 402 500 May 31 Depreciation 20. 2 May 31 Depreciation 20. 3 May 31 Depreciation 20. 4 May 31 Depreciation 20. 5 May 31 Depreciation 402 500 Machinery at cost Realisation of machinery R 20. 2 460 000 May 31 Accumulated dep Cr R 57 500 126 500 69 000 46 000 103 500 402 500 Cr R 402 500
Disposal of PPE General journal Profits and losses on disposal of assets must be disclosed separately in the statement of profit or loss and other comprehensive income.
Note on PPE
Property, plant and equipment: General ledger Dr 20. 5 May 31 Machinery at cost Realisation of machinery R 20. 5 460 000 May 31 Accumulated depr Loss on disposal of machinery 460 000 Dr Loss on disposal of machinery 20. 5 R May 31 Realisation of mach 57 500 Cr R 402 500 57 500 460 000 Cr R
Disposal of PPE General journal Profits and losses on disposal of assets must be disclosed separately in the statement of profit or loss and other comprehensive income.
Note on PPE
Property, plant and equipment: Trade-in an asset A new machine (ACN) is purchased for R 20 000. An old machine (CNA), which cost R 10 000 and on which depreciation amounting to R 8 000 has been provided for, is traded in on the new machine. A trade-in value of R 2 500 is received and the balance of the purchase price of the new machine is paid in cash. Require: 1. Journal entries 2. Ledger accounts.
Property, plant and equipment: Trade-in an asset A new machine (ACN) is purchased for R 20 000. An old machine (CNA), which cost R 10 000 and on which depreciation amounting to R 8 000 has been provided for, is traded in on the new machine. A trade-in value of R 2 500 is received and the balance of the purchase price of the new machine is paid in cash. Require: 1. Journal entries 2. Ledger accounts.
Ledger accounts Dr New Machine ACN Detail Creditor Fol b/d Dr R Detail Cr Fol 20 000 Creditor Detail Fol R R Cr Detail New machine ACN Fol R 20 000
Property, plant and equipment: A new machine (ACN) is purchased for R 20 000. General Journal Details Machinery Creditor New machine CAN purchased Debit R Credit R 20 000
Property, plant and equipment: Trade-in an asset A new machine (ACN) is purchased for R 20 000. An old machine (CNA), which cost R 10 000 and on which depreciation amounting to R 8 000 has been provided for, is traded in on the new machine. A trade-in value of R 2 500 is received and the balance of the purchase price of the new machine is paid in cash. Require: 1. Journal entries 2. Ledger accounts.
Ledger accounts Dr Machine CAN Detail Balance Fol b/d Dr Detail Fol 10 000 Machinery realisation 8 000 Balance b/d Machinery realisation Detail Machine CAN (cost) Profit on sale of noncurrent asset Fol R Detail 10 000 Accumulated depreciation Creditor R 10 000 Accumulated depreciation: Machine CAN Fol R Cr Detail Fol Machinery realisation Dr R Cr R 8 000 Cr Fol b/d R 8 000 2 500 10 500
Property, plant and equipment: An old machine (CNA), which cost R 10 000 and on which depreciation amounting to R 8 000 has been provided for, is traded in on the new machine. General Journal Details Machinery realisation account Machinery account Transfer of original cost price of machine sold to the realisation account Accumulated depreciation: Machinery realisation account Transfer of accumulated depreciation on machinery sold to the realisation account Debit R Credit R 10 000 8 000
Property, plant and equipment: Trade-in an asset A new machine (ACN) is purchased for R 20 000. An old machine (CNA), which cost R 10 000 and on which depreciation amounting to R 8 000 has been provided for, is traded in on the new machine. A trade-in value of R 2 500 is received and the balance of the purchase price of the new machine is paid in cash. Require: 1. Journal entries 2. Ledger accounts.
Ledger accounts Dr Machine CAN Detail Balance Fol b/d Dr Detail R Cr Detail Fol 10 000 Machinery realisation 10 000 Accumulated depreciation: Machine CAN Fol R Cr Detail Fol Machinery realisation 8 000 Balance Dr b/d Machinery realisation Detail Machine CAN (cost) Profit on sale of noncurrent asset Fol R Detail 10 000 Accumulated depreciation Creditor R R 8 000 Cr Fol b/d R 8 000 2 500 10 500
Property, plant and equipment: An old machine (CNA), which cost R 10 000 and on which depreciation amounting to R 8 000 has been provided for, is traded in on the new machine. General Journal Details Machinery realisation account Machinery account Transfer of orininal cost price of machine sold to the realisation account Accumulated depreciation: Machinery realisation account Transfer of accumulated depreciation on machinery sold to the realisation account Debit R Credit R 10 000 8 000
Property, plant and equipment: Trade-in an asset A new machine (ACN) is purchased for R 20 000. An old machine (CNA), which cost R 10 000 and on which depreciation amounting to R 8 000 has been provided for, is traded in on the new machine. A trade-in value of R 2 500 is received and the balance of the purchase price of the new machine is paid in cash. Require: 1. Journal entries 2. Ledger accounts.
Ledger accounts Dr Detail Creditor Fol Machinery realisation R Cr Detail Fol 2 500 New machine ACN Dr 20 000 Machinery realisation Detail Machine CAN (cost) Profit on sale of noncurrent asset Fol R Detail 10 000 Accumulated depreciation Creditor R Cr Fol b/d R 8 000 2 500 10 500
Property, plant and equipment: General Journal Details Creditor Bank Settlement of purchase price. (Usually in CPJ) Creditor Machinery realisation account Trading-in of CNA machine Machinery realisation account Profit on trade-in of non-current asset Transfer of profit on trade-in of CNA machine Debit R Credit R 17 500 2 500 500
Property, plant and equipment: Trade-in an asset A new machine (ACN) is purchased for R 20 000. An old machine (CNA), which cost R 10 000 and on which depreciation amounting to R 8 000 has been provided for, is traded in on the new machine. A trade-in value of R 2 500 is received and the balance of the purchase price of the new machine is paid in cash. Require: 1. Journal entries 2. Ledger accounts.
Ledger accounts Dr Detail Creditor Fol Machinery realisation R Cr Detail Fol 2 500 New Machine ACN Bank R 20 000 17 500 20 000 Dr Detail Bank Fol R Cr Detail Fol Creditor Dr 17 500 Machinery realisation Detail Machine CAN (cost) Profit on sale of noncurrent asset Fol R Detail 10 000 Accumulated depreciation Creditor R Cr Fol b/d R 8 000 2 500 10 500
Property, plant and equipment: A trade-in value of R 2 500 is received and the balance of the purchase price of the new machine is paid in cash. General Journal Details Creditor Bank Settlement of purchase price. (Usually in CPJ) Creditor Machinery realisation account Trading-in of CNA machine Machinery realisation account Profit on trade-in of non-current asset Transfer of profit on trade-in of CNA machine Debit R Credit R 17 500 2 500 500
Ledger accounts Dr Detail Profit or loss Fol R Cr Detail Fol Machinery realisation Dr 500 Machinery realisation Detail Machine CAN (cost) Profit on sale of noncurrent asset Fol R Detail 10 000 Accumulated depreciation Creditor R Cr Fol b/d R 8 000 2 500 10 500
Property, plant and equipment: A trade-in value of R 2 500 is received and the balance of the purchase price of the new machine is paid in cash. General Journal Details Creditor Bank Settlement of purchase price. (Usually in CPJ) Creditor Machinery realisation account Trading-in of CNA machine Machinery realisation account Profit on trade-in of non-current asset Transfer of profit on trade-in of CNA machine Debit R Credit R 17 500 2 500 500
Exercise Property, plant and equipment: The following information relates to Bacinis: Balances as at 31 August 20. 3: Plant and machinery (at cost) Accumulated depreciation: Plant and machinery R 85 000 R 46 600 ADDITIONAL INFORMATION (a) According 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. (b) Depreciation is written off at 20% per annum by the diminishing balance method. (c) On 31 January 20. 4, management decided to increase production capacity and purchased a Jojo machine on credit from Maxi Limited for R 90 000. One of the Zobo machines was traded in, reducing the owing to Maxi Ltd to R 70 500. (d) On 1 February 20. 4, installation charges on the new machine amounting to R 6 000 were paid in cash. Require: 1. Prepare the note regarding property, plant and equipment for the year ended 31 August 20. 4
Exercise Property, plant and equipment: The following information relates to Bacinis: Balances as at 31 August 20. 3: Plant and machinery (at cost) Accumulated depreciation: Plant and machinery R 85 000 R 46 600 ADDITIONAL INFORMATION (a) According 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. (b) Depreciation is written off at 20% per annum by the diminishing balance method. (c) On 31 January 20. 4, management decided to increase production capacity and purchased a Jojo machine on credit from Maxi Limited for R 90 000. One of the Zobo machines was traded in, reducing the owing to Maxi Ltd to R 70 500. (d) On 1 February 20. 4, installation charges on the new machine amounting to R 6 000 were paid in cash. Require: 1. Prepare the note regarding property, plant and equipment for the year ended 31 August 20. 4
BACINIS NOTES FOR THE YEAR ENDED 31 AUGUST 20. 4 Property, plant and equipment Machinery Total R R Carrying amount: Beginning of year Cost Accumulated depreciation 38 400 85 000 (46 600) Additions (R 90 000 + R 6 000) Depreciation (R 1 600+ R 3 840 + R 11 200) 96 000 (16 640) Disposals Cost Accumulated depreciation (17 600) (42 500) 24 900 Carrying amount: End of year Cost (R 85 000 + R 96 000 – R 42 500) Accumulated depreciation (R 46 600 + R 16 640 – R 24 900) 100 160 138 500 (38 340)
Depreciation Begin of fin yr Fin yr end 31 Jan 20. 4 31 Aug 20. 1 31 Aug 20. 2 Previous financial years Cost R 85 000/2 = R 42 500 Acc depreciation R 46 600/2 = R 23 300 31 Aug 20. 3 31 Aug 20. 4 Current financial year
Exercise Property, plant and equipment: The following information relates to Bacinis: Balances as at 31 August 20. 3: Plant and machinery (at cost) Accumulated depreciation: Plant and machinery R 85 000 R 46 600 ADDITIONAL INFORMATION (a) According 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. (b) Depreciation is written off at 20% per annum by the diminishing balance method. (c) On 31 January 20. 4, management decided to increase production capacity and purchased a Jojo machine on credit from Maxi Limited for R 90 000. One of the Zobo machines was traded in, reducing the owing to Maxi Ltd to R 70 500. (d) On 1 February 20. 4, installation charges on the new machine amounting to R 6 000 were paid in cash. Require: 1. Prepare the note regarding property, plant and equipment for the year ended 31 August 20. 4
Depreciation Begin of fin yr Fin yr end 31 Jan 20. 4 31 Aug 20. 1 31 Aug 20. 2 Previous financial years Cost R 85 000/2 = R 42 500 Acc depreciation R 46 600/2 = R 23 300 31 Aug 20. 3 31 Aug 20. 4 Current financial year
BACINIS NOTES FOR THE YEAR ENDED 31 AUGUST 20. 4 Property, plant and equipment Machinery Total R R Carrying amount: Beginning of year Cost Accumulated depreciation 38 400 85 000 (46 600) Additions (R 90 000 + R 6 000) Depreciation (R 1 600+ R 3 840 + R 11 200) 96 000 (16 640) Disposals Cost Accumulated depreciation (R 23 300 + R 1 600) (17 600) (42 500) 24 900 Carrying amount: End of year Cost (R 85 000 + R 96 000 – R 42 500) Accumulated depreciation (R 46 600 + R 16 640 – R 24 900) 100 160 138 500 (38 340)
Depreciation Begin of fin yr Fin yr end 31 Jan 20. 4 31 Aug 20. 1 31 Aug 20. 2 Previous financial years 31 Aug 20. 3 31 Aug 20. 4 Current financial year Cost R 85 000/2 = R 42 500 Cost R 96 000 Acc depreciation R 46 600/2 = R 23 300
BACINIS NOTES FOR THE YEAR ENDED 31 AUGUST 20. 4 Property, plant and equipment Machinery Total R R Carrying amount: Beginning of year Cost Accumulated depreciation 38 400 85 000 (46 600) Additions (R 90 000 + R 6 000) Depreciation (R 1 600+ R 3 840 + R 11 200) 96 000 (16 640) Disposals Cost Accumulated depreciation (17 600) (42 500) 24 900 Carrying amount: End of year Cost (R 85 000 + R 96 000 – R 42 500) Accumulated depreciation (R 46 600 + R 16 640 – R 24 900) 100 160 138 500 (38 340)
Exercise Property, plant and equipment: The following information relates to Bacinis: Balances as at 31 August 20. 3: Plant and machinery (at cost) Accumulated depreciation: Plant and machinery R 85 000 R 46 600 ADDITIONAL INFORMATION (a) According 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. (b) Depreciation is written off at 20% per annum by the diminishing balance method. (c) On 31 January 20. 4, management decided to increase production capacity and purchased a Jojo machine on credit from Maxi Limited for R 90 000. One of the Zobo machines was traded in, reducing the owing to Maxi Ltd to R 70 500. (d) On 1 February 20. 4, installation charges on the new machine amounting to R 6 000 were paid in cash. Require: 1. Prepare the note regarding property, plant and equipment for the year ended 31 August 20. 4
Depreciation Begin of fin yr Fin yr end 31 Jan 20. 4 31 Aug 20. 1 31 Aug 20. 2 Previous financial years 31 Aug 20. 3 31 Aug 20. 4 Current financial year Cost R 85 000/2 = R 42 500 Cost R 96 000 Acc depreciation R 46 600/2 = R 23 300 R 42 500 – R 23 300 = R 19 200 x 20% x 5/12 = R 1 600
BACINIS NOTES FOR THE YEAR ENDED 31 AUGUST 20. 4 Property, plant and equipment Machinery Total R R Carrying amount: Beginning of year Cost Accumulated depreciation 38 400 85 000 (46 600) Additions (R 90 000 + R 6 000) Depreciation (R 1 600+ R 3 840 + R 11 200) 96 000 (16 640) Disposals Cost Accumulated depreciation (R 23 300 + R 1 600) (17 600) (42 500) 24 900 Carrying amount: End of year Cost (R 85 000 + R 96 000 – R 42 500) Accumulated depreciation (R 46 600 + R 16 640 – R 24 900) 100 160 138 500 (38 340)
Exercise Property, plant and equipment: The following information relates to Bacinis: Balances as at 31 August 20. 3: Plant and machinery (at cost) Accumulated depreciation: Plant and machinery R 85 000 R 46 600 ADDITIONAL INFORMATION (a) According 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. (b) Depreciation is written off at 20% per annum by the diminishing balance method. (c) On 31 January 20. 4, management decided to increase production capacity and purchased a Jojo machine on credit from Maxi Limited for R 90 000. One of the Zobo machines was traded in, reducing the owing to Maxi Ltd to R 70 500. (d) On 1 February 20. 4, installation charges on the new machine amounting to R 6 000 were paid in cash. Require: 1. Prepare the note regarding property, plant and equipment for the year ended 31 August 20. 4
BACINIS NOTES FOR THE YEAR ENDED 31 AUGUST 20. 4 Property, plant and equipment Machinery Total R R Carrying amount: Beginning of year Cost Accumulated depreciation 38 400 85 000 (46 600) Additions (R 90 000 + R 6 000) Depreciation (R 1 600+ R 3 840 + R 11 200) 96 000 (16 640) Disposals Cost Accumulated depreciation (R 23 300 + R 1 600) (17 600) (42 500) 24 900 Carrying amount: End of year Cost (R 85 000 + R 96 000 – R 42 500) Accumulated depreciation (R 46 600 + R 16 640 – R 24 900) 100 160 138 500 (38 340)
Depreciation Begin of fin yr Fin yr end 31 Jan 20. 4 31 Aug 20. 1 31 Aug 20. 2 Previous financial years 31 Aug 20. 3 31 Aug 20. 4 Current financial year Cost R 85 000/2 = R 42 500 R 19 200 x 20% = R 3 840 Cost R 96 000 Acc depreciation R 46 600/2 = R 23 300 R 42 500 – R 23 300 = R 19 200 x 20% x 5/12 = R 1 600
BACINIS NOTES FOR THE YEAR ENDED 31 AUGUST 20. 4 Property, plant and equipment Machinery Total R R Carrying amount: Beginning of year Cost Accumulated depreciation 38 400 85 000 (46 600) Additions (R 90 000 + R 6 000) Depreciation (R 1 600+ R 3 840 + R 11 200) 96 000 (16 640) Disposals Cost Accumulated depreciation (17 600) (42 500) 24 900 Carrying amount: End of year Cost (R 85 000 + R 96 000 – R 42 500) Accumulated depreciation (R 46 600 + R 16 640 – R 24 900) 100 160 138 500 (38 340)
Depreciation Begin of fin yr Fin yr end 31 Jan 20. 4 31 Aug 20. 1 31 Aug 20. 2 Previous financial years 31 Aug 20. 3 31 Aug 20. 4 Current financial year Cost R 85 000/2 = R 42 500 R 19 200 x 20% = R 3 840 Cost R 96 000 Acc depreciation R 46 600/2 = R 23 300 R 42 500 – R 23 300 = R 19 200 x 20% x 5/12 = R 1 600 R 96 000 x 20% x 7/12 = R 11 200
BACINIS NOTES FOR THE YEAR ENDED 31 AUGUST 20. 4 Property, plant and equipment Machinery Total R R Carrying amount: Beginning of year Cost Accumulated depreciation 38 400 85 000 (46 600) Additions (R 90 000 + R 6 000) Depreciation (R 1 600+ R 3 840 + R 11 200) 96 000 (16 640) Disposals Cost Accumulated depreciation (17 600) (42 500) 24 900 Carrying amount: End of year Cost (R 85 000 + R 96 000 – R 42 500) Accumulated depreciation (R 46 600 + R 16 640 – R 24 900) 100 160 138 500 (38 340)
BACINIS NOTES FOR THE YEAR ENDED 31 AUGUST 20. 4 Property, plant and equipment Machinery Total R R Carrying amount: Beginning of year Cost Accumulated depreciation 38 400 85 000 (46 600) Additions (R 90 000 + R 6 000) Depreciation (R 1 600+ R 3 840 + R 11 200) 96 000 (16 640) Disposals Cost Accumulated depreciation (17 600) (42 500) 24 900 Carrying amount: End of year Cost (R 85 000 + R 96 000 – R 42 500) Accumulated depreciation (R 46 600 + R 16 640 – R 24 900) 100 160 138 500 (38 340)
BACINIS NOTES FOR THE YEAR ENDED 31 AUGUST 20. 4 Property, plant and equipment Machinery Total R R Carrying amount: Beginning of year Cost Accumulated depreciation 38 400 85 000 (46 600) Additions (R 90 000 + R 6 000) Depreciation (R 1 600+ R 3 840 + R 11 200) 96 000 (16 640) Disposals Cost Accumulated depreciation (17 600) (42 500) 24 900 Carrying amount: End of year Cost (R 85 000 + R 96 000 – R 42 500) Accumulated depreciation (R 46 600 + R 16 640 – R 24 900) 100 160 138 500 (38 340)
BACINIS NOTES FOR THE YEAR ENDED 31 AUGUST 20. 4 Property, plant and equipment Machinery Total R R Carrying amount: Beginning of year Cost Accumulated depreciation 38 400 85 000 (46 600) Additions (R 90 000 + R 6 000) Depreciation (R 1 600+ R 3 840 + R 11 200) 96 000 (16 640) Disposals Cost Accumulated depreciation (17 600) (42 500) 24 900 Carrying amount: End of year Cost (R 85 000 + R 96 000 – R 42 500) Accumulated depreciation (R 46 600 + R 16 640 – R 24 900) 100 160 138 500 (38 340)
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