Homework Help is Here – Start Your Trial Now!
Business
Accounting
ment as it would appear in the financial statements of Fit Line Gym for the year ended 31 December 2020 in compliance with International Financial Reporting Standards suitable for this type of business entity. Show all workings. Round off all calculations to the nearest Rand. You may ignore the total column.

ment as it would appear in the financial statements of Fit Line Gym for the year ended 31 December 2020 in compliance with International Financial Reporting Standards suitable for this type of business entity. Show all workings. Round off all calculations to the nearest Rand. You may ignore the total column.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Prepare the note for Property, plant and equipment as it would appear in the financial statements of Fit Line Gym for the year ended 31 December 2020 in compliance with International Financial Reporting Standards suitable for this type of business entity. Show all workings. Round off all calculations to the nearest Rand. You may ignore the total column.

1.2 The following information was extracted from the financial records including the asset register for Fit Line Gym for the year ended 31 December 2020: Buildings Gym Equipment Furniture & Fittings Property, plant & equipment: Balances at 1 January 2020 R R R Cost 550 000 275 000 88 000 Accumulated depreciation (27 500) (140 000) (23 500) Additional information: 1. Accounting policies with regards to depreciation of property, plant and equipment: 1.1 Buildings are depreciated at 2% per year on the fixed instalment method. 1.2 Gym equipment is depreciated at 20% per year using the reducing balance method. 1.3 Furniture and fittings are depreciated on the fixed instalment method over an estimated useful life of 4 years. 2. The following transactions which are not included in the above balances, took place during the financial year ended 31 December 2020: 2.1 Due to increased membership, the owner decided to extend the building and install new fixtures and fittings. Extension to the building was completed at a cost of R60 000. The extension was ready for use on 1 July 2020. However, members only began using the new extension from 1 August 2020. 2.2 Fixtures and fittings were installed for a total cost of R20 000. Fixtures were also ready for use on 1 July 2020 but put to use on 1 August 2020. 2.3 On 30 September 2020 old gym equipment was traded-in for R45 000 for new electronic equipment costing R121 000. The new equipment was installed
Transcribed Image Text:1.2 The following information was extracted from the financial records including the asset register for Fit Line Gym for the year ended 31 December 2020: Buildings Gym Equipment Furniture & Fittings Property, plant & equipment: Balances at 1 January 2020 R R R Cost 550 000 275 000 88 000 Accumulated depreciation (27 500) (140 000) (23 500) Additional information: 1. Accounting policies with regards to depreciation of property, plant and equipment: 1.1 Buildings are depreciated at 2% per year on the fixed instalment method. 1.2 Gym equipment is depreciated at 20% per year using the reducing balance method. 1.3 Furniture and fittings are depreciated on the fixed instalment method over an estimated useful life of 4 years. 2. The following transactions which are not included in the above balances, took place during the financial year ended 31 December 2020: 2.1 Due to increased membership, the owner decided to extend the building and install new fixtures and fittings. Extension to the building was completed at a cost of R60 000. The extension was ready for use on 1 July 2020. However, members only began using the new extension from 1 August 2020. 2.2 Fixtures and fittings were installed for a total cost of R20 000. Fixtures were also ready for use on 1 July 2020 but put to use on 1 August 2020. 2.3 On 30 September 2020 old gym equipment was traded-in for R45 000 for new electronic equipment costing R121 000. The new equipment was installed
and tested by the supplier at an additional cost of R9 000. The old equipment that was traded-in was bought on 1 January 2019 for a capitalised cost of R66 000. The difference between the trade-value and the cost of the new electronic equipment was settled by an Electronic Funds Transfer (EFT). 3. No other transactions for the purchase and /or sale of property, plant and equipment took place during the current financial year. Required: Prepare the note for Property, plant and equipment as it would appear in the financial statements of Fit Line Gym for the year ended 31 December 2020 in compliance with International Financial Reporting Standards suitable for this type of business entity. Show all workings. Round off all calculations to the nearest Rand. You may ignore the total column. (20)
Transcribed Image Text:and tested by the supplier at an additional cost of R9 000. The old equipment that was traded-in was bought on 1 January 2019 for a capitalised cost of R66 000. The difference between the trade-value and the cost of the new electronic equipment was settled by an Electronic Funds Transfer (EFT). 3. No other transactions for the purchase and /or sale of property, plant and equipment took place during the current financial year. Required: Prepare the note for Property, plant and equipment as it would appear in the financial statements of Fit Line Gym for the year ended 31 December 2020 in compliance with International Financial Reporting Standards suitable for this type of business entity. Show all workings. Round off all calculations to the nearest Rand. You may ignore the total column. (20)
Expert Solution
steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Accounting for Property, Plant and Equipment
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS