QUESTION ONE The financial year of Company X starts from 1st. May every year. On 17th July 2022, X. ltd acquired the following non-current assets: Note: Land worth sh.990,000 (being part of 1,480,000) was acquired in cash, no land is on finance lease. The company's policy is to charge depreciation at the following rates: Cash/On Credit On Finance lease Hire Purchase Plant & Machinery 250,000 460,000 900,000 Land & Buildings 1,480,000 720,000 - Furniture 860,000 950,000 230,000 Motor vehicles 960,000 870,000 125,000 Other Fixtures & Fittings 654,000 620,000 860,000 Rate Land Nil Buildings 10 % on cost Plant and machinery 7% on reducing balance method. Motor vehicles, Fixtures & Fittings & Furniture 12% on reducing balance method. A proportionate charge is made in the year of purchase, sale, or revaluation of an asset. The following transactions took place: On 14th December 2022, the company decided to revalue its Land & buildings up to sh.3,800,000. (Land Sh.1,500,000). On 20th March 2023, a new plant was hire purchased for Sh.210,000. On 1st April 2023, a motor vehicle that was acquired on credit from Modern Suppliers ltd for Sh.228,000 was disposed for sh.194,000. On 13th January 2023 Furniture worth sh. 115,000 was hire purchased from Sammy furniture Ltd. Required Account for these assets as per IAS 16 for this financial year. Prepare the PPE schedule and show the amount that will appear in the balance sheet.
QUESTION ONE
The financial year of Company X starts from 1st. May every year. On 17th July 2022, X. ltd acquired the following non-current assets:
Note: Land worth sh.990,000 (being part of 1,480,000) was acquired in cash, no land is on finance lease.
The company's policy is to charge
Cash/On Credit On Finance lease Hire Purchase
Plant & Machinery 250,000 460,000 900,000
Land & Buildings 1,480,000 720,000 -
Furniture 860,000 950,000 230,000
Motor vehicles 960,000 870,000 125,000
Other Fixtures & Fittings 654,000 620,000 860,000
Rate
Land Nil
Buildings 10 % on cost
Plant and machinery 7% on
Motor vehicles, Fixtures & Fittings & Furniture
12% on reducing balance method.
A proportionate charge is made in the year of purchase, sale, or revaluation of an asset.
The following transactions took place:
On 14th December 2022, the company decided to revalue its Land & buildings up to sh.3,800,000. (Land Sh.1,500,000).
On 20th March 2023, a new plant was hire purchased for Sh.210,000.
On 1st April 2023, a motor vehicle that was acquired on credit from Modern Suppliers ltd for Sh.228,000 was disposed for sh.194,000.
On 13th January 2023 Furniture worth sh. 115,000 was hire purchased from Sammy furniture Ltd.
Required
Account for these assets as per IAS 16 for this financial year.
Prepare the PPE schedule and show the amount that will appear in the balance sheet.
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