Reference no: EM132694949

Question - The following balances appeared in the books of Change Traders on 30 September 2019.

Land and Buildings R1 500 000

Vehicles R600 000

Accumulated depreciation: vehicles R220 000

Furniture R180 000

Accumulated depreciation: furniture R48 780

Additional information:

On 31 December 2019 one of the vehicles were sold for cash of R170 000. This vehicle was bought at a cost of R250 000 on 1 October 2017.

On 1 April 2020 Change Traders bought new furniture to the value of R15 000 from Office Traders.

A new building was bought on 30 June 2020 for R500 000.

No other acquisitions or disposals took place during the 2020 financial year.

Vehicles are depreciated at a rate of 20% per annum on a straight-line basis and furniture at 10% per annum according to the diminishing balance method. Vehicles and furniture have no residual values. Land and Buildings are not depreciated. Ignore VAT.

Required - Round to two decimal places.

Q1. Calculate the total profit or loss to be recognised on disposal of the vehicle. Clearly state whether a profit or loss was made.

Q2. Prepare the property, plant and equipment note to the financial statements for the year ended 30 September 2020. The total column is not required.