Reference no: EM133132482
Question - On 1 April 2021 the fixed asset balance sheet of JM Ltd comprised the following:
|
Original cost Sh.'000'
|
Accumulated Depreciation Sh.'000'
|
Net Book Value Sh.'000'
|
|
Freehold land and buildings
|
1,480
|
-
|
1,480
|
|
Plant and equipment
|
1,970
|
1,190
|
780
|
|
Motor Vehicles
|
940
|
392
|
548
|
|
Furniture and fittings
|
240
|
80
|
160
|
The straight-line rates of depreciation based on cost, used to that date were 10% p.a. for plant and machinery, 20% p.a. for motor vehicles and 12 % p.a. for furniture and fittings. It is the company's practice to make a full year's charge on new items in the year of purchase, but no depreciation is raised in the year of disposal.
The following additional information is to be taken into account in the calculation of depreciation for the year ended 31 March 2021:
i) An item of machine bought in December 2015 for Shs.120,000 is now recognised to have an additional useful life of 10 years.
ii) It has been decided to charge depreciation on the buildings at 4% p.a. The buildings comprise Shs.800,000 out of the total cost of Shs.1,480,000 and were all completed in September 2014.
iii) A vehicle purchased in May 2013 for Shs.65,000 was traded in during the year at a value of Shs.42,000 in part exchange for new vehicle costing Shs.120,000.
iv) Included with furniture and fittings is an item which originally cost Shs.16,000 and which is already fully depreciated but is not expected to last for much longer.
v) Included with the plant and machinery is equipment bought in June 2013 for Shs.180,000. Due to rapid technological development and change, the machine has become obsolete and had to be replaced in May 2020, with another new machine at a cost of Sh.250,000. The obsolete machine was sold as scrap for Shs.20,000.
Required - Using appropriate schedules, show the balances suitable for inclusion in the company's published accounts for the year to 31 March 2021.