McDovaldo Ltd is a manufacturing company and its year-end is 30 June. The following details are available relating to its fixed property. Land situated at stand 88, Mayfair, with an original was originally bought on 1 April 20.12 The area in which the land is situated has become very popular, and on 1 May 20.13 a property developer approached McDovaldo Ltd to buy the land from it. The developer offered McDovaldo Ltd for the piece of land. The McDovaldo Ltd has decided to accept the property developer's offer.
2. McDovaldo Ltd owns property in Sandton, situated at stand 33, which was originally purchased on 1 July 20.12 for R1 800 000. The value of the land at that date was R500 000 and the building R1 300 000. This property is rented out in full under a four-year operating lease agreement since the date of acquisition. There are occupying the building and the monthly rental receivable from them is R10 000 and R18 000 respectively. McDovaldo Ltd during the current year as part of its general maintenance program for the building. The cost of repainting the building amounted to a value of this property was to be R2 010 000 (land R600 000 and building R1 410 000).3. McDovaldo Ltd owns property in Alberton, situated at That is being future use as an investment property. The cost of the land on 1 January 20.12 was R400 000. On 30 June 20.12, the construction costs to date amounted to R1 420 000. The construction of the office building was completed on 30 November 20.12 and the total cost of constructing this building amounted to R1 790 000 (this is also the fair value of the building). There was no abnormal wastage of materials. No depreciation is written off on the asset. McDovaldo Ltd was able to secure only one tenant for the new building by 30 June 20.13. Additional capital expenditure of R38 000 was incurred during May 20.13 in order to secure this tenant. The office building is leased out in terms of an operating lease agreement since 1 June 20.13 for the next five years. On 30 June 20.13, the fair value of the building was determined at R1 840 000 and that of the land at R480 000. McDovaldo Ltd owns an office building in Randburg, situated at stand 11, that it occupies for its own business purposes. The original cost (date of acquisition 1 July 20.10) of the property was R1 200000, of which R180 000 of the cost can be allocated to the land. The building is depreciated over 20 years. There is no impairment of value applicable to this land and building. The residual value of the building will remain at Rnil. McDovaldo Ltd applies the fair value model to its investment property and the cost model to its property, plant, and equipment.
All valuations were performed by P Taks of Val a Prop, a firm of independent sworn appraisers. Mr. Taks holds a recognized and relevant professional qualification and has recent experience in the location and category of the investment property being valued. The fair values were determined by reference to current market evidence. The most recent valuations were performed at year-end.
Profit before tax for the year ended 30 June 20.13, after taking into account the effect of all of the above information, amounted to R500 000 (20.12 – R400 000). The applicable tax rate is 28% (20.12 – 28%). 66,6% of all capital gains are taxable. The South African Revenue Service does not allow a building allowance on the abovementioned office buildings.10. Deferred tax is provided on all temporary differences by using the statement of financial position approach. Only the above information will have deferred tax implications for both years. All assets were acquired after 1 October 2001.
REQUIRED
Disclose the above-mentioned information in the statement of financial position of McDovaldo Ltd on 30 June 20.13 and in the notes for the year that ended on that date. Your answer must comply with the requirements of International Financial Reporting Standards. Comparative figures are required.

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12-08-2024
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McDovaldo Ltd is a manufacturing company and its year-end is 30 June. The following details are available relating to its fixed property. Land situated at stand 88, Mayfair, with an original was originally bought on 1 April 20.12 The area in which the land is situated has become very popular, and on 1 May 20.13 a property developer approached McDovaldo Ltd to buy the land from it. The developer offered McDovaldo Ltd for the piece of land. The McDovaldo Ltd has decided to accept the property developer's offer.
2. McDovaldo Ltd owns property in Sandton, situated at stand 33, which was originally purchased on 1 July 20.12 for R1 800 000. The value of the land at that date was R500 000 and the building R1 300 000. This property is rented out in full under a four-year operating lease agreement since the date of acquisition. There are occupying the building and the monthly rental receivable from them is R10 000 and R18 000 respectively. McDovaldo Ltd during the current year as part of its general maintenance program for the building. The cost of repainting the building amounted to a value of this property was to be R2 010 000 (land R600 000 and building R1 410 000).3. McDovaldo Ltd owns property in Alberton, situated at That is being future use as an investment property. The cost of the land on 1 January 20.12 was R400 000. On 30 June 20.12, the construction costs to date amounted to R1 420 000. The construction of the office building was completed on 30 November 20.12 and the total cost of constructing this building amounted to R1 790 000 (this is also the fair value of the building). There was no abnormal wastage of materials. No depreciation is written off on the asset. McDovaldo Ltd was able to secure only one tenant for the new building by 30 June 20.13. Additional capital expenditure of R38 000 was incurred during May 20.13 in order to secure this tenant. The office building is leased out in terms of an operating lease agreement since 1 June 20.13 for the next five years. On 30 June 20.13, the fair value of the building was determined at R1 840 000 and that of the land at R480 000. McDovaldo Ltd owns an office building in Randburg, situated at stand 11, that it occupies for its own business purposes. The original cost (date of acquisition 1 July 20.10) of the property was R1 200000, of which R180 000 of the cost can be allocated to the land. The building is depreciated over 20 years. There is no impairment of value applicable to this land and building. The residual value of the building will remain at Rnil. McDovaldo Ltd applies the fair value model to its investment property and the cost model to its property, plant, and equipment.
All valuations were performed by P Taks of Val a Prop, a firm of independent sworn appraisers. Mr. Taks holds a recognized and relevant professional qualification and has recent experience in the location and category of the investment property being valued. The fair values were determined by reference to current market evidence. The most recent valuations were performed at year-end.
Profit before tax for the year ended 30 June 20.13, after taking into account the effect of all of the above information, amounted to R500 000 (20.12 – R400 000). The applicable tax rate is 28% (20.12 – 28%). 66,6% of all capital gains are taxable. The South African Revenue Service does not allow a building allowance on the abovementioned office buildings.10. Deferred tax is provided on all temporary differences by using the statement of financial position approach. Only the above information will have deferred tax implications for both years. All assets were acquired after 1 October 2001.
REQUIRED
Disclose the above-mentioned information in the statement of financial position of McDovaldo Ltd on 30 June 20.13 and in the notes for the year that ended on that date. Your answer must comply with the requirements of International Financial Reporting Standards. Comparative figures are required.

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