Richy Limited has plant that cost R345 000 on 01 January 2016. Installation and modification costs R69 000 (including vat). Transfer costs paid to lawyer amounted to R20 000. Transport costs for bringing the asset to location amounted to R20 000. The plant was ready for use on 01 January 2016. The machines were cleaned on 01 March 2016 at a cost of R10 000. Due to the low order levels in April 2016 the plant stood idle. Depreciation is provided over its useful life of 5 years using the straight-line method to a nil residual value. Richy Limited measures plant under the revaluation model. The plant was revalued as follows: 31 December 2016 R310 000 31 December 2017 R300 000 31 December 2018 R250 000 Richy Limited transfers the maximum amount from the realised portion of the revaluation surplus to equity. VAT must be calculated at 15%. Required: Disclose the above information in the notes to the financial statements for years ending 2016, 2017 and 2018. (Include in you answer the journal entries that must be recorded 5 in the general journal.)
QUESTION FOUR
Richy Limited has plant that cost R345 000 on 01 January 2016. Installation and
modification costs R69 000 (including vat). Transfer costs paid to lawyer amounted to
R20 000. Transport costs for bringing the asset to location amounted to R20 000. The
plant was ready for use on 01 January 2016. The machines were cleaned on 01 March
2016 at a cost of R10 000. Due to the low order levels in April 2016 the plant stood idle.
nil residual value.
Richy Limited measures plant under the revaluation model. The plant was revalued as
follows:
31 December 2016 R310 000
31 December 2017 R300 000
31 December 2018 R250 000
Richy Limited transfers the maximum amount from the realised portion of the
revaluation surplus to equity. VAT must be calculated at 15%.
Required:
Disclose the above information in the notes to the financial statements for years ending
2016, 2017 and 2018. (Include in you answer the
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