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You have just been recruited as a financial analyst for Zamfeed Ltd, a Kabwe based animal feed producer. The Chief Financial Officer has requested you to assist with the preparation of a trend statement for Zamfeed. Zamfeed has been in existence for four years. Figures for the three preceding years are known but those for the fourth year need to be calculated. Unfortunately, the supporting workings for the preceding years figures cannot be found and the clients own ledger accounts and workings were destroyed in a recent fire. One item in particular, plant, is causing difficulty and the following figures have been given to you: 12 months ended 31 December 2017 2018 2019 2020 K K K K (A) Plant at cost 80,000 80,000 90,000 ? (B) Accumulated depreciation (16,000) (28,800) (28,080) ? (C) Net (written down) value 64,000 51,200 61,920 ? The only other information available relates to disposals as follows: Date of Date of Original Sales Disposal Acquisition cost Proceeds K K 1st disposal 01.04.2019 01.01.2017 15,000 8,000 2nd disposal 01.07.2019 01.01.2017 30,000 21,000 Plant sold was replaced on the same day by new plant. The cost of the plant which replaced the first disposal is not known but the replacement for the second disposal is known to have cost K50,000. Required: i. Identify the method of calculating depreciation used by the client, and contrast it with two other methods recommended by IAS 16. [12 Marks] ii. Demonstrate how the figures shown at line (B) for each of the years ended 31 December 2017 and 2018 were calculated. [08 Marks] iii. Produce the figures that should be included in the blank spaces on the trend statement at lines (A), (B) and (C) for the years ended 31 December 2019 and 2020. [10 Marks] iv. Calculate the profit or loss arising on each of the two disposals.

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