KipKor Ltd is a sports shoe manufacturing company, situated in Mamelodi, Gauteng.
The company has a 31 December year end.
The following details relate to the assets of KipKor Ltd:
Machine
On 1 July 2022 Kipkor Ltd purchased a machine for an amount of R500 000. Included
in the purchase consideration is an amount of R60 000 relating to inspection costs.
The machine was available for use, as intended by management, on acquisition date.
The machine must be inspected every 3 years to comply with safety regulations. Due
to unforeseen circumstances, Kipkor Ltd had to inspect the machine on 31 December
2023 and incurred inspection costs amounting to R75 000.
A residual value of Rnil was allocated to the machine and it is estimated that the
machine will produce 600 000 units during its useful life. For the 2022 and 2023
financial years the machine produced 15 000 units and 45 000 units respectively.
Delivery vehicle
On 1 April 2023 KipKor Ltd purchased a second-hand delivery vehicle for an invoice
amount of R150 000. A special arrangement was made with the seller to defer
payment until 1 April 2024. On acquisition date the vehicle was available for use, as
intended by management. On acquisition date it was estimated that the vehicle had
an expected useful life of 5 years and a residual value of Rnil was allocated to the
vehicle.
Administration building
KipKor Ltd owns an administration building that was initially held as an investment
property on acquisition. The property was purchased on 1 January 2019 at a cost of
R2 400 000 (Land: R700 000; Building: R1 700 000).
During the 2022 financial year KipKor Ltd decided to rather occupy the administration
building themselves instead of renting it out and subsequently took occupation of the
administration building on 30 April 2022. On 30 April 2022 it was estimated that the
building had a remaining useful life of 30 years and a residual value of R500 000 was
allocated to the building.
The fair values and net replacement values of the administration property on the
respective dates were as follows:
Land Building Total
30 April 2022 900 000 2 300 000 3 200 000
31 December 2023 750 000 2 150 000 2 900 000
2
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller LIBRARYpro. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $2.71. You're not tied to anything after your purchase.
