How often Property, plant & equipment and depreciation is asked

Where it was asked

• May/Jun 201413 marks
• Oct/Nov 201330 marks
• May/Jun 201325 marks

The questions

1. May/Jun 2014, Q3.19.5 marks

   On 31 March 2013 Laura Mapetla traded in an old machine (purchase price R12 000, accumulated depreciation R8 000 at 31 December 2012) for a new machine costing R20 000, receiving a trade-in value of R5 000. Machinery is depreciated at 20% p.a. on the diminishing balance. Ignore VAT. Disclose the profit or loss on disposal and the depreciation in the statement of profit or loss and other comprehensive income for the year ended 31 December 2013, per IFRS, showing calculations.

2. May/Jun 2014, Q3.23.5 marks

   Using the L Mapetla information, disclose property, plant and equipment in the statement of financial position at 31 December 2013 per IFRS (the note is not required), showing calculations.

3. Oct/Nov 2013, Q3.117 marks

   Mr T Bonsai operates a small property-renting business from his home. The following balances were taken from his accounting records at the end of his financial year, 31 December 2012, under the heading Bonsai Traders - Balances as at 31 December 2012: capital R153 850 (credit); drawings R4 567 (debit); land and buildings at cost R273 560 (debit); vehicle at cost R60 000 (debit); equipment at cost R40 000 (debit); accumulated depreciation on vehicle at 1 January 2012 R36 000 (credit); accumulated depreciation on equipment at 1 January 2012 R5 500 (credit); debtors control R37 897 (debit); consumable stores on hand (31 December 2011) R19 250 (debit); bank R10 087 (debit); petty cash R257 (debit); creditors control R16 568 (credit); municipality levy R3 000 (debit); rent income R50 000 (credit); insurance R4 500 (debit); water and electricity R3 800 (debit); and mortgage R200 000 (credit). Additional information: the total comprehensive income for the year ended 31 December 2012 amounted to R3 675 after the following adjustments were taken into account: (1) consumable stores on hand at 31 December 2012 was R17 250; (2) the bank statement for 31 December 2012 revealed a direct deposit of R3 500 for January 2013 rental income, which was recorded as such in the bank account; (3) because of industrial action by local municipality employees, the water and electricity accounts of R500 for December 2012 and R450 for January 2013 will only be paid in February 2013; (4) the insurance premium of R1 500 for December still needs to be provided for; (5) equipment with a cost price of R8 000 was purchased on 1 July 2012, and installation costs of R1 500 were incurred; (6) the mortgage terms provide for interest on the loan at 5% per annum, and the current year's interest still needs to be provided for; (7) on 1 September 2012 a vehicle with a cost price of R5 000, purchased on 1 January 2009, was sold for cash; and (8) depreciation must be provided for as follows: vehicles at 20% per annum on the straight-line method, and equipment at 10% per annum on the straight-line method. All calculations must be shown and all amounts must be rounded off to the nearest R1. Using the balances and additional information given for Bonsai Traders for the year ended 31 December 2012, prepare the property, plant and equipment note to the financial statements. The total column may be omitted.

4. Oct/Nov 2013, Q3.213 marks

   Mr T Bonsai operates a small property-renting business from his home. The following balances were taken from his accounting records at the end of his financial year, 31 December 2012, under the heading Bonsai Traders - Balances as at 31 December 2012: capital R153 850 (credit); drawings R4 567 (debit); land and buildings at cost R273 560 (debit); vehicle at cost R60 000 (debit); equipment at cost R40 000 (debit); accumulated depreciation on vehicle at 1 January 2012 R36 000 (credit); accumulated depreciation on equipment at 1 January 2012 R5 500 (credit); debtors control R37 897 (debit); consumable stores on hand (31 December 2011) R19 250 (debit); bank R10 087 (debit); petty cash R257 (debit); creditors control R16 568 (credit); municipality levy R3 000 (debit); rent income R50 000 (credit); insurance R4 500 (debit); water and electricity R3 800 (debit); and mortgage R200 000 (credit). Additional information: the total comprehensive income for the year ended 31 December 2012 amounted to R3 675 after the following adjustments were taken into account: (1) consumable stores on hand at 31 December 2012 was R17 250; (2) the bank statement for 31 December 2012 revealed a direct deposit of R3 500 for January 2013 rental income, which was recorded as such in the bank account; (3) because of industrial action by local municipality employees, the water and electricity accounts of R500 for December 2012 and R450 for January 2013 will only be paid in February 2013; (4) the insurance premium of R1 500 for December still needs to be provided for; (5) equipment with a cost price of R8 000 was purchased on 1 July 2012, and installation costs of R1 500 were incurred; (6) the mortgage terms provide for interest on the loan at 5% per annum, and the current year's interest still needs to be provided for; (7) on 1 September 2012 a vehicle with a cost price of R5 000, purchased on 1 January 2009, was sold for cash; and (8) depreciation must be provided for as follows: vehicles at 20% per annum on the straight-line method, and equipment at 10% per annum on the straight-line method. All calculations must be shown and all amounts must be rounded off to the nearest R1. Using the balances and additional information given for Bonsai Traders, prepare the statement of financial position of Bonsai Traders as at 31 December 2012.

5. May/Jun 2013, Q4.18 marks

   CAMP Dealers is used for this question, which starts with an extract from its trial balance as at 1 March 2012 showing a bank debit balance of R2 150, machinery at cost of R220 000, equipment at cost of R70 000, sales of R250 000, VAT input of R1 600, VAT output of R1 800, accumulated depreciation on machinery of R22 000 and accumulated depreciation on equipment of R7 000. The cash receipts journal for May 2012 reflects, in total, a bank column of R74 335, sales of R25 000, cost of sales of R9 300, debtors control of R8 500, settlement discount granted of R250, VAT output of R8 120, VAT input of R35 and sundry amounts of R33 000, with the sundry amount relating to the sale of machinery. The cash payments journal for May 2012 shows a bank total of R117 601, machinery purchases of R47 000, equipment purchases of R56 400, VAT input of R14 476, VAT output of R75, settlement discount received of R200 and no sundry amounts. A general journal extract for the year ended 28 February 2013 records, on 1 February 2013, the purchase of equipment on credit from AZH Design: equipment R36 000 and VAT input R5 040 are debited, and creditors control/AZH Design is credited with R41 040. Additional information provided is that CAMP Dealers depreciates machinery at 10% per annum on the straight-line method and equipment at 10% per annum on the diminishing-balance method; the machinery that was sold had originally been bought on 1 March 2011 for R50 000; and the only acquisitions and disposals of property, plant and equipment during the period took place in May 2012 and February 2013. For CAMP Dealers, calculate the depreciation on machinery and the depreciation on equipment for the year ended 28 February 2013, using the information given about the trial balance as at 1 March 2012, the May 2012 cash receipts and cash payments journals, the February 2013 general journal entry for the equipment bought from AZH Design, and the note that machinery is depreciated at 10% per annum straight-line while equipment is depreciated at 10% per annum diminishing-balance, bearing in mind that the machinery sold was originally purchased on 1 March 2011 for R50 000 and that the only additions and disposals of property, plant and equipment occurred in May 2012 and February 2013.