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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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