, Question 1 (50 Marks)
(a) General Journal Entries for the Mamelodi Property
Calculations:
Initial Cost: * Purchase price R9 800 000 + Transfer duty net of refund (R610 000 x 78%) R475 800 + Legal fees R185 000
+ Agent commission R140 000 = R10 600 800
Depreciation (2023 to 1 July 2025): (R10 600 800 - R900 000) / 40 years = R242 520 per annum.
o 2023 (10 months): R242 520 x 10/12 = R202 100
o 2024 (12 months): R242 520
o 2025 (6 months to 1 July): R242 520 x 6/12 = R121 260
o Total Accumulated Depreciation at 1 July 2025: R202 100 + R242 520 + R121 260 = R565 880
Carrying Amount at 1 July 2025: R10 600 800 - R565 880 = R10 034 920
Revaluation before transfer to IP: Fair value R10 900 000 - CA R10 034 920 = R865 080
Fair value adjustment (31 Dec 2025): Fair value R9 200 000 - R10 900 000 = R1 700 000 (Loss)
(a) General Journal Entries for the Mamelodi Property
Calculations:
Initial Cost: * Purchase price R9 800 000 + Transfer duty net of refund (R610 000 x 78%) R475 800 + Legal fees R185 000
+ Agent commission R140 000 = R10 600 800
Depreciation (2023 to 1 July 2025): (R10 600 800 - R900 000) / 40 years = R242 520 per annum.
o 2023 (10 months): R242 520 x 10/12 = R202 100
o 2024 (12 months): R242 520
o 2025 (6 months to 1 July): R242 520 x 6/12 = R121 260
o Total Accumulated Depreciation at 1 July 2025: R202 100 + R242 520 + R121 260 = R565 880
Carrying Amount at 1 July 2025: R10 600 800 - R565 880 = R10 034 920
Revaluation before transfer to IP: Fair value R10 900 000 - CA R10 034 920 = R865 080
Fair value adjustment (31 Dec 2025): Fair value R9 200 000 - R10 900 000 = R1 700 000 (Loss)
