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Parents Pricing Home NSC Accounting Comments on an audit report Refer to Information B
Refer to Information B - NSC Accounting - Question 3 - 2017 - Paper 1 Question 3
View full question Refer to Information B.
Calculate the missing amounts denoted by (a) to (e).
Fixed assets:
Cost
Accumulated depreciation
Carrying value (01/03/2016)
Carrying val... show full transcript
View marking scheme Worked Solution & Example Answer:Refer to Information B - NSC Accounting - Question 3 - 2017 - Paper 1
(a) Calculate the carrying value of Land and Buildings on 1 March 2016. Only available for registered users.
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To find the carrying value of Land and Buildings on 1 March 2016, use the formula:
e x t C a r r y i n g V a l u e ( 01 / 03 / 2016 ) = e x t C a r r y i n g V a l u e ( 28 / 02 / 2017 ) + e x t A c c u m u l a t e d D e p r e c i a t i o n ext{Carrying Value (01/03/2016)} = ext{Carrying Value (28/02/2017)} + ext{Accumulated Depreciation} e x t C a rry in g Va l u e ( 01/03/2016 ) = e x t C a rry in g Va l u e ( 28/02/2017 ) + e x t A cc u m u l a t e d De p rec ia t i o n Plugging in the values:
e x t C a r r y i n g V a l u e ( 01 / 03 / 2016 ) = R 2 , 550 , 000 + R 325 , 000 = R 2 , 225 , 000 ext{Carrying Value (01/03/2016)} = R2,550,000 + R325,000 = R2,225,000 e x t C a rry in g Va l u e ( 01/03/2016 ) = R 2 , 550 , 000 + R 325 , 000 = R 2 , 225 , 000
(b) Calculate the total depreciation on vehicles on 28 February 2017. Only available for registered users.
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Total depreciation is calculated by combining depreciation for new and old vehicles:
New Vehicles:
ext{Depreciation} = R422,550 imes rac{20}{100} imes rac{6}{12} = R42,255
Old Vehicles:
ext{Depreciation} = R35,000 imes rac{20}{100} = R7,000 ext{, but only R34,999 can be written off.}
So,
e x t T o t a l D e p r e c i a t i o n = R 42 , 255 + R 7 , 254 = R 49 , 509 ext{Total Depreciation} = R42,255 + R7,254 = R49,509 e x t T o t a l De p rec ia t i o n = R 42 , 255 + R 7 , 254 = R 49 , 509
(c) Calculate the carrying value of Vehicles on 28 February 2017. Only available for registered users.
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The carrying value of Vehicles can be calculated as follows:
e x t C a r r y i n g V a l u e = e x t C o s t o f N e w V e h i c l e + e x t C o s t o f O l d V e h i c l e − e x t T o t a l D e p r e c i a t i o n ext{Carrying Value} = ext{Cost of New Vehicle} + ext{Cost of Old Vehicle} - ext{Total Depreciation} e x t C a rry in g Va l u e = e x t C os t o f N e w V e hi c l e + e x t C os t o f Ol d V e hi c l e − e x t T o t a l De p rec ia t i o n Substituting the values:
e x t C a r r y i n g V a l u e = R 35 , 000 + R 422 , 550 − R 77 , 254 = R 380 , 296 ext{Carrying Value} = R35,000 + R422,550 - R77,254 = R380,296 e x t C a rry in g Va l u e = R 35 , 000 + R 422 , 550 − R 77 , 254 = R 380 , 296
(d) Calculate the carrying value of Equipment on 31 December 2016. Only available for registered users.
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The carrying value of Equipment can be derived from:
e x t C a r r y i n g V a l u e = e x t C o s t − e x t T o t a l D e p r e c i a t i o n ext{Carrying Value} = ext{Cost} - ext{Total Depreciation} e x t C a rry in g Va l u e = e x t C os t − e x t T o t a l De p rec ia t i o n Substituting the estimated figures:
e x t C a r r y i n g V a l u e = R 120 , 000 − R 12 , 000 − R 10 , 800 − R 8 , 100 = R 89 , 100 ext{Carrying Value} = R120,000 - R12,000 - R10,800 - R8,100 = R89,100 e x t C a rry in g Va l u e = R 120 , 000 − R 12 , 000 − R 10 , 800 − R 8 , 100 = R 89 , 100
(e) Calculate the total carrying value of fixed assets on 28 February 2017. Only available for registered users.
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Total carrying value of fixed assets can be calculated by summing the individual carrying values:
e x t T o t a l C a r r y i n g V a l u e = e x t L a n d a n d B u i l d i n g s + e x t V e h i c l e s + e x t E q u i p m e n t ext{Total Carrying Value} = ext{Land and Buildings} + ext{Vehicles} + ext{Equipment} e x t T o t a lC a rry in g Va l u e = e x t L an d an d B u i l d in g s + e x t V e hi c l es + e x t Eq u i p m e n t Using previously calculated values:
e x t T o t a l C a r r y i n g V a l u e = R 2 , 550 , 000 + R 380 , 296 + R 50 , 994 = R 2 , 981 , 290 ext{Total Carrying Value} = R2,550,000 + R380,296 + R50,994 = R2,981,290 e x t T o t a lC a rry in g Va l u e = R 2 , 550 , 000 + R 380 , 296 + R 50 , 994 = R 2 , 981 , 290 Join the NSC students using SimpleStudy...97% of StudentsReport Improved Results
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