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P2-D2.
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- September 12, 2023 at 6:07 pm #691958
Nstsheledi Manufacturing Limited acquired an investment property for P5.5 million on 1 January 2019. The purchase agreement provided for settlement in full at the end of 2019 at an appropriate discount factor of 10%. The following information for the acquired property was availed:
i) P500 000 transfer duty
ii) P10 000 legal fees were incurred and paid during January 2019 in respect of the acquisition of this property.
iii) RAtes for the year ended 31 December 2019 of P50 000, were paid on 30 November 2019.
All amounts were exclusive of tax.Ntsheledi Manufacturing Company constructed an investment property during 2019, expenditure on which is as follows:
a) Labour: P1 millions of which:
(i) P100 000 incurred for restoration of faulty work
(ii) P 50 000 incurred for unproductive timeb) Materials: P4 millions of which:
(i) P500 000 incurred for restoration of faulty work
(ii) P250 000 for normal wastagec)Other resources: P1000 000.
Ntsheledi Manufacturing Company completed the self-constructed building on 30 November 2019:
Due to low uptake the company made an operating loss on this investment property of P250 000 in December 2019. It is projected that this investment property will reach breakeven uptake during August 2019, and the total budgeted operating loss to that date is estimated to be P1 million.
Required: Compute the initial recognition of the investment property by Ntsheledi Manufacturing Company and calculate the cost of each of the investment properties. (15 marks)
September 13, 2023 at 3:06 pm #691998Hi,
So what is it that is giving you specific difficulty? If you let me know then I can help.
Thanks
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