c. ICONIC Venture has recently purchased a Machine from Plant pool, the following are the details:

Basic list purchase price of plant ($) 480,000

Trade discount applicable 12.5%

Directly attributable costs:

Transport and handling cost($) 5,500

Estimated pre-usage testing (health & safety) ($) 25,500

Maintenance contract for 5 yrs($) 5,000

Site preparation cost:

Electricity cable installation ($) 28,000

Steel reinforcement costs ($) 9,000

Own labour and material cost($) 15,000

The following information is relevant to the plant.

• Alpha paid for the plant (excluding the directly attributable cost) within four weeks of the order. Thereby obtaining an early settlement discount of 5%.

• The air conditioning plant is expected to last for eight years. At the end of this period, there will be compulsory cost of $20,000 to dismantle the plant and $6,000 to restore the building to its original use condition.

• Alpha had incorrectly specified the power loading of the original electricity cash to be installed by the contracted. The cost of rectifying this error of $12,000 is included in the above figure $28,000.

Required:

Calculate the amount of which the initial cost of the plant should be recognised (ignore discounting) and Show the extract of the statement of financial position of the entry of the initial cost.