The following information was extracted from the financial records including the asset register for Fit Line Gym for the year ended 31 December 2020:
The following information was extracted from the financial records including the asset register for Fit Line Gym for the year ended 31 December 2020:
| Property, Plant & Equipment: Balance at 1 January 2020 |
Buildings
|
Gym Equipment R |
Furniture & Fittings R |
| Cost |
550 000 (27 500) |
275 000 (140 000) |
88 000 (23 500) |
Additional information:
- 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
method.
1.3 Furniture and fittings are depreciated on the fixed instalment method over
an estimated useful life of 4 years.
- 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).
- 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.
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