Mobius Ltd, during the year ended 31 Mar 2021, constructed a building or us in its trade of manufacturing. The building was completed and put in use Mar 2021. The company incurred the following related costs: Land Building Materials 100,000,000 50,000,000 Manufacturing Machinery Placed in Building 20,000,000 Calculate total industrial building allowance for the 2020/21 year of
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- Worldwide Fuels, a public limited company, is preparing its financial statements for the year ending 31 December 2020. The exhibits contain information relevant to the question. Exhibit 1- Construction of energy generating facility On 1 February 2020 Worldwide Fuels started the construction of an energy generating facility. The following costs were incurred during the construction: £000 Freehold land Site preparation 1,500 725 Materials 3,500 8,250 1,000 Direct labour costs Legal fees General overheads 575 To aid construction of the energy generating facility, Worldwide Fuels issued a £10 million unsecured loan on 1 February 2020. The loan carried an interest rate of 15% per annum and is repayable on 1 February 2025. On 30 June 2020, Worldwide Fuels finalised the construction of the energy generating facility. The facility was brought into use on 1 August 2020. The facility has an expected useful economic life of 30 years and that it will have no residual value at that date. Worldwide…You have been presented with the following separate scenarios for the year ended 31 May 2020.Scenario 1During the financial year ending 31 May 2020 Mkhize Ltd manufactured a machine for its own use. Costs incurred are summarised as follows: Direct materials R 4 500 000 Direct labour R3 250 000 Production overheads 75% of labour cost.The machine was completed and put into use on 1 December 2019. All machines are depreciated at a rate of 15% per annum on the reducing balance method. Mkhize Ltd applies a 35% mark‐up on cost in determining the selling price of goods.Scenario 2During 2020 the directors of Chana Ltd decided to value its industrial plant to market value. The plant was acquired on 1 June 2015 at a cost of R45 000 000 and had an estimated useful life of 15 years on the date of acquisition. The plant was valued at R41 500 000 on 1 June 2019. Plant is carried using the revaluation method and depreciation is on the straight‐ line basis. Q.4.1 Calculate the depreciation charge…You have been presented with the following separate scenarios for the year ended 31 May 2020.Scenario 1During the financial year ending 31 May 2020 Mkhize Ltd manufactured a machine for its ownuse. Costs incurred are summarised as follows: Direct materials R 4 500 000 Direct labour R3 250 000 Production overheads 75% of labour cost.The machine was completed and put into use on 1 December 2019. All machines are depreciated at a rate of 15% per annum on the reducing balance method. Mkhize Ltd applies a 35% mark‐up on cost in determining the selling price of goods. Scenario 2During 2020 the directors of Chana Ltd decided to value its industrial plant to market value.The plant was acquired on 1 June 2015 at a cost of R45 000 000 and had an estimated useful life of 15 years on the date of acquisition. The plant was valued at R41 500 000 on 1 June 2019. Plant is carried using the revaluation method and depreciation is on the straight‐ line basis.Required:Q.4.1 Calculate the depreciation…
- On 1 January 2019 Ravioli pc began construction of a new factory. The work was completed on 31st December 2020. The costs related to the construction are shown below: £m Acquisition of land 6.0 Planning application and legal fees. 0.5 Architect and engineering fees. 0.9 Site preparation of the land 1.1 Construction materials 3.4 Construction labour 3.3 Included in the £3m of construction materials is £200,000 of timber that was not stored properly. The timber rotted before it could be used and had to be thrown away. Ravioli has various general loans outstanding during the period. The details are: £8m loan at an interest rate of 4% £6m loan at an interest rate of 5% £10m loan at an interest rate of 5.8%…On January 1, 2021. Robredo Co. started the construction of a building with a fixed contract price of P10,000,000. The outcome of the construction project can be estimated reliably and the contractor decided to employ cost to cost method. The following data are provided by the accountant and project manager concerning the construction costs for the three years of construction: Year 12/31/2021 12/31/2022 12/31/2023 P 3740000 Costs incurred during the year Realized gross profit/(loss) during the year Percentage of completion as of the end of the year ? ? P750,000 (P250,000) (P800,000) 50% 37.5% ? What is the balance of Construction in Progress on December 31, 2023?. On November 15, 2021, Trade Company made payments for the following expenditures: Replacement parts for overhaul of machine 550,000 Labor and overhead in connection with overhaul 140,000 Continuing, frequent and low cost repairs 150,000 Replacement of broken gear of machine 50,000 1. The overhaul resulted in a significant increase in production. 2. the journal entry to record the expenditure to be capitalized would be
- During the financial year ending 31 May 2020 Mkhize Ltd manufactured a machine for its ownuse. Costs incurred are summarised as follows: Direct materials R 4 500 000 Direct labour R3 250 000 Production overheads 75% of labour cost.The machine was completed and put into use on 1 December 2019. All machines aredepreciated at a rate of 15% per annum on the reducing balance method. Mkhize Ltd applies a 35% mark‐up on cost in determining the selling price of goods. Scenario 2During 2020 the directors of Chana Ltd decided to value its industrial plant to market value. The plant was acquired on 1 June 2015 at a cost of R45 000 000 and had an estimateduseful life of 15 years on the date of acquisition. The plant was valued at R41 500 000 on 1 June 2019. Plant is carried using the revaluation method and depreciation is on thestraight‐ line basis. Required:Q.4.1 Calculate the depreciation charge for the year ended 31 May 2020 for bothscenarios, as well as the carrying value of both items as…During 2020, Mowgli Company incurred the following costs:R&D services performed by Elijah Company for Mowgli P1,500,00R&D costs incurred by Mowgli Company for Elisha Company and reimbursable by Elisha Company 2,400,000Cost incurred in the conceptual formulation of possible process alternative 2,000,000Building cost that will be used as R & D facility, acquired on January 1, 2013, with estimated useful life of 10 years 3,000,000 Design of tools, jigs and moulds 1,300,000Cost of testing prototype and design modifications 900,000In its 2020 profit and loss, what should Mowgli Company report as research and development expense?The following costs were incurred by Barak Klever Ltd in 2020 in the design andconstruction of a new office building over a nine-month period during 2020:GH¢000Feasibility study 8Architects' fees 100 Site clearance (by external demolition professionals) 80Construction materials 600Cost of own inventories used in the construction(net realisable value if sold outside the company GH¢24,000) 30Internal construction staff salaries during period of construction 360External contractor costs 2,400Income from renting out part of site as storage depotduring early phase of construction (12)3,566Required:In accordance with IAS 16 Property, plant and equipment, calculate the amount that Barak KleverLtd should capitalise as property in the financial statements for the year ending 31 December 2020 b. Courage Hodey Inc. owns the following properties as at 31 December 2019:Property: Fair value (GH¢million)Land with future use undetermined 3.2Factory rented to Courage Hodey's subsidiary under an…
- Concord Corp. contracted to construct a building for $729000. Construction began in 2023 and was completed in 2024. Data relating to the contract follow: Costs incurred Estimated costs to complete Year Ended December 31 O $112642 and $74358. O $133122 and $53878. O $423000 and $306000. O $0 and $236000. 2023 $306000 202000 2024 $236000 Concord uses the percentage-of-completion method. For the calendar years 2023 and 2024, respectively, Concord should report gross profit ofCompany A entered into a P4,500,000 fixed-price contract with a contractor on March 1, 2019 for the construction of an office building. The building was completed and occupied on September 30, 2020. Additional construction costs were incurred as follows: Plans, specifications and blueprints 18,000 Architect's fees for design and supervision 142,500 The building is estimated to have a 40-year useful life from the date of completion and will be depreciated using the 150%-declining balance method. To finance the construction cost, the company borrowed P4,500,000 on March 1, 2019. The loan is payable in 10 annual installments of P450,000 plus interest at the rate of 10%. The company used part of the loan proceeds for working capital requirements. The Company's average amounts of accumulated building construction expenditures were as follows: For the period March 1 to December 31, 2019 1,350,000 For the period January 1 to September 31, 2020 3,450,000…Isem Co.’s 2019 manufacturing costs were as follows: Direct materials and directlabor P700,000; Other variable manufacturing costs 100,000; Depreciation offactory building and manufacturing equipment 80,000; Other fixedmanufacturing overhead 18,000. What amount should be considered productcost for external reporting purposes? A. P700,000B. P800,000C. P880,000D. P898,000