SunnySide (Pty) Ltd (“SunnySide”) is a cap manufacturer based in sunny Mpumalanga. Their financial year end is 31 December. On 1 January 2017 SunnySide bought a property for R2 500 000 (20% for land and 80% for buildings). This was correctly classified as property, plant and equipment in the books of SunnySide as they used the building in their production process. On 1 January 2011, SunnySide decided it would change its intentions, and lease the land and building to one of their competitors. The fair value on this date was the same as the fair value on 31 December 2018. The fair value of the land and buildings at various dates are as follows (20% for land and 80% for buildings):31 December 2017: R2 550 000; 31 December 2018: R2 800 000; 31 December 2019: R3 000 000  SunnySide carries all investment property using the fair value model.  SunnySide carries all property, plant and equipment using the cost model.  Depreciation is provided on a straight-line basis. The useful life of the building on 1 January 2017 was estimated to be 20 years with a residual value of zero. There have been no changes to this useful life or residual value.          SARS allows a S13 allowance on the buildings at 4% per annum, not apportioned. No allowances are granted on land.  The applicable tax rate is constant at 28% (inclusion rate for capital gains tax is 50%). You may assume that there is no limitation on the recognition of deferred tax assets. Ignore VAT.  Accounting for the above transactions in Sunnyside's books for the financial year ended 31 December 2019 should be completed in the above journal entries.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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SunnySide (Pty) Ltd (“SunnySide”) is a cap manufacturer based in sunny Mpumalanga. Their financial year end is 31 December. On 1 January 2017 SunnySide bought a property for R2 500 000 (20% for land and 80% for buildings). This was correctly classified as property, plant and equipment in the books of SunnySide as they used the building in their production process. On 1 January 2011, SunnySide decided it would change its intentions, and lease the land and building to one of their competitors. The fair value on this date was the same as the fair value on 31 December 2018. The fair value of the land and buildings at various dates are as follows (20% for land and 80% for buildings):31 December 2017: R2 550 000; 31 December 2018: R2 800 000; 31 December 2019: R3 000 000
 SunnySide carries all investment property using the fair value model.
 SunnySide carries all property, plant and equipment using the cost model.
Depreciation is provided on a straight-line basis. The useful life of the building on 1 January 2017 was estimated to be 20 years with a residual value of zero. There have been no changes to this useful life or residual value.          SARS allows a S13 allowance on the buildings at 4% per annum, not apportioned. No allowances are granted on land.
 The applicable tax rate is constant at 28% (inclusion rate for capital gains tax is 50%). You may assume that there is no limitation on the recognition of deferred tax assets. Ignore VAT.


 Accounting for the above transactions in Sunnyside's books for the financial year ended 31 December 2019 should be completed in the above journal entries. 

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Please indicate whether each entry is accounted for in profit or loss (P/L), other comprehensive income (OCI), statement of changes in equity (SCE) or statement of financial position (SFP)

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