EXERCISE $1\mathrm{.}3$ IAS $1$

Ms N Naidoo purchased a diamond cutting machine for her jewellery manufacturing business

on $2$ March $20\mathrm{.}16.$ She incurred the following costs to get the machine installed and ready for

use:

$-$ Cost of the machine: R$632500$

$-$ Delivery cost: R$1495$

$-$ Installation cost: R$4370$

$-$ Training cost to operate the machine: R$920$

During the year she also paid R$2750$ for repairs to fix the machine. The repairs were not

subjected to VAT.

Ms N Naidoo currently depreciates all manufacturing equipment at $30\%$ according to the

diminishing balance method. The residual value of the machine is R$5000($VAT exclusive$).$

Ms N Naidoo is a registered VAT vendor and VAT at $15\%$ is included except where stipulated

to the contrary.

$20$

REQUIRED

Disclose the machine and related costs in the financial statements of Ms N Naidoo at

$31$ December $20\mathrm{.}16$ to comply with the requirements of IAS $1.$ The accounting policy note is

not required.