High Fashions Limited is a recognized export house. In the month of January 2017, it imported a highly sophisticated embroidery machine from US at a cost of $ 200,000. At the time of import, the prevailing exchange rate was $ = ₹ 65. The company incurred an amount of ₹ 100,000 towards freight and insurance during transit. The import attracted import duty at the rate of 20%. The machine was transported to the factory building at an additional cost of ₹ 20,000 towards local transportation. Expenses towards installation came to ₹ 30,000. The installation was completed on 31st March 2017. The test runs were conducted during April 2017. During the test run company spent a further sum of ₹ 25,000. After successful test run the machine was put to commercial use. 

1. How would the amounts spent upto 31st March 2017 impact the balance sheet as on that date and the statement of profit and loss for the year ended on that date? 

2. When and at what value the machine should be capitalized?