Reference no: EM132616327

Collar Ltd had a number of transactions that it was unsure of how to process in the general ledger. The manager approached you, being a knowledgeable accounting student to assist in the finalisation of the accounts. The transactions are listed below.

• The company is a registered VAT vendor. All purchases and sales transactions are carried out with registered VAT vendors. All amounts are VAT inclusive unless otherwise stated. The year-end is 31 December.
• The plant and equipment were purchased on 1 April 2015. The assets were delivered to the premises on 1 May 2015 and production commenced on 1 July 2015 the same day it was available for use. The purchase price was R238 000 and transport costs of R28 900 were incurred in delivering the equipment to the factory premises.
• It was anticipated that the plant and equipment would produce benefits evenly over a 5 year period; with resale value at the end of its period of use of 10% of the cost of the asset.
• On 1 January 2018, the technicians reassessed the total useful life of the plant and equipment to be 8 years.

You are required to:

Problem 1: Process the general journal entries for the acquisition of the plant and equipment, indicating dates.