Prepare only the Property, plant and equipment reconciliation note of Still Waters Ltd for the financial year ended 31 December 2020 The following list of balances, is an extract from the trial balance of Still Waters Ltd on31 December 2020:Debit /Land at cost (1 January 2020)..Buildings at cost (1 January 2020)Machinery at cost(Credit)1450 0001 920 0001 465 000Motor vehicles at cost650 000Accumulated depreciation.- Motor vehicles(234 000)Additional information1.Land and buildings:1.1 New land was purchased for R900 000 on 2 January 2020, on which a factory building wasconstructed during the current year. The construction costs amounted to R1 980 000.1.2 Machinery with a cost of R560 000 and a residual value of R60 000, was withdrawn fromproduction from 2 January 2020 until 30 September 2020 to be used in the construction ofthe building. The building was ready for use on 1 October 2020.1.3 Existing land and buildings (purchased on 1 September 2017), at the beginning of thecurrent financial year are owner-occupied and used as the company's administration offices,but was rented out from 1 October 2020 to third parties. This was due to only 5% of officeoccupancy needed since the outbreak of the Corona virus. The respective cost of the landand the buildings was R1 450 000 and R1 920 000. The respective net replacement valueof the land and the fair value of the buildings on 1 October 2020 was 10% above theircarrying amount on that date.1.4 On 31 December 2020, the current financial year end of Still Waters Ltd, the fair value of theproperty was as follows:RLand..Buildings1 600 0001 800 000All of the net replacement values and fair values were determined by Mr Honour anindependent swon appraiser.1.5 Machinery and buildings are measured according to the cost model and land measuredaccording to the revaluation model as per IAS 16 - Property, Plant and Equipment. StillWaters Ltd applies the fair value model for investment property as per IAS40 - Investmentproperty.2.Machinery with a cost of R490 000 was disposed of at its carrying value on 1 August 2020. Thecompany purchased all its machinery on 1 December 2017.On 1 July 2020 a motor vehicle with a cost of R220 000 was purchased to replace a motor vehiclethat was disposed of in the previous financial year.3.4.The following rates of depreciation are applicable:BuildingsVehicles5% straight-line method20% reducing balance method20% straight-line methodMachinery

Fixed assetsThe assets available in the company for the use of operating activities and used for a…

Answered: Prepare only the Property, plant and…

Prepare only the Property, plant and equipment reconciliation note of Still Waters Ltd for the financial year ended 31 December 2020

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter3: Basic Accounting Systems: Accrual Basis

Section: Chapter Questions

Problem 3.23E: Adjustment for depreciation The estimated amount of depredation on equipment for the current year is...

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