Peasy Limited purchased a specialized item of plant, details of which are as follows: Cost ( purchased on credit) R660 000 Date of purchase 1 January 2014 Useful life 5 years Residual value Nil Depreciation method Straight line This item of plant is measured under the revaluation model and had the following fair values: 1 January 2016 R528 000 1 January 2017 R440 000 Peasy Limited transfers the realized portion of the revaluation surplus to retained earnings over the useful life of the plant. REQUIRED Prepare the journals for the plant for the year ended 31 December 2014 to 2017 assuming: a) The gross replacement value method is used. b) The net replacement value method is used.
Peasy Limited purchased a specialized item of plant, details of which are as follows: Cost ( purchased on credit) R660 000 Date of purchase 1 January 2014 Useful life 5 years Residual value Nil Depreciation method Straight line This item of plant is measured under the revaluation model and had the following fair values: 1 January 2016 R528 000 1 January 2017 R440 000 Peasy Limited transfers the realized portion of the revaluation surplus to retained earnings over the useful life of the plant. REQUIRED Prepare the journals for the plant for the year ended 31 December 2014 to 2017 assuming: a) The gross replacement value method is used. b) The net replacement value method is used.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Peasy Limited purchased a specialized item of plant, details of which are as follows: Cost (
purchased on credit) R660 000 Date of purchase 1 January 2014 Useful life 5 years Residual
value Nil Depreciation method Straight line This item of plant is measured under the
revaluation model and had the following fair values: 1 January 2016 R528 000 1 January 2017
R440 000 Peasy Limited transfers the realized portion of the revaluation surplus to retained
earnings over the useful life of the plant. REQUIRED Prepare the journals for the plant for the
year ended 31 December 2014 to 2017 assuming: a) The gross replacement value method is
used. b) The net replacement value method is used.
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