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3.3 The construction manager indicated that delivery costs for Machine B (in question 3.2 above) will amount to R15 600 and installation costs will
3.3 The construction manager indicated that delivery costs for Machine B (in question 3.2 above) will amount to R15 600 and installation costs will amount to R36 000. I need to tell her where to record these costs and why. Am I correct in saying these costs should be debited to the delivery expenses and installation expenses accounts in the general ledger? Please indicate whether or not I am correct, in either case please be clear as to HOW these costs should be treated and why they should be treated in (5 Marks) this way. 3.4 On 1 October 2011, Building Together Pty (Ltd) purchased an eight-wheeler truck for delivery of sand and stone. The truck was ready for use on the purchase date. The truck had a purchase price of R870 000 and a residual value of R160 000 and was expected to be used evenly over 6 years. On 28 February 2013, the business purchased and installed an additional unit to the truck that sweeps excess stone and sand off the back of the truck. The total cost of the unit (including installation) amounted to R195 000. It is expected that the new unit will be disposed of on the same date as the truck. The new unit has a residual value of R35 000. Please calculate the depreciation expense for the year ended 31 July 2014. (5 Marks)
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