Mocktails Ltd, a resident of South Africa with a December year-end, purchased a plot of land on 1 April 2000 for R550 000. Mocktails Ltd erected a factory on the land, costing R2 100 000. The factory is used to manufacture cold drink products for the local market. The erection of the factory was completed on 1 June 2002 and was immediately brought into use. Mocktails extended its factory which increased the capacity of the factory by 25%. The extension to the factory was completed at a cost of R1 300 000 and brought into use on 1 December 2012. On 25 September 2021 Mocktails Ltd received an offer for the purchase of the factory from an independent third party and agreed to sell the factory for R6 250 000.

Mocktails Ltd, a resident of South Africa with a December year-end, purchased a plot of land on 1 April 2000 for R550 000. Mocktails Ltd erected a factory on the land, costing R2 100 000. The factory is used to manufacture cold drink products for the local market. The erection of the factory was completed on 1 June 2002 and was immediately brought into use. Mocktails extended its factory which increased the capacity of the factory by 25%. The extension to the factory was completed at a cost of R1 300 000 and brought into use on 1 December 2012. On 25 September 2021 Mocktails Ltd received an offer for the purchase of the factory from an independent third party and agreed to sell the factory for R6 250 000.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 7PA: Tree Lovers Inc. purchased 100 acres of woodland in which the company intends to harvest the...

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