JT is registered with its local tax authority and can reclaim value-added tax paid on items purchased.

During the year JT purchased a large machine from another country. The supplier invoiced JT as follows:

Cost of basic machine

100,000

Special modifications made to basic design

15,000

Suppliers engineers time installing and initial testing of machine

2,000

Three years maintenance and servicing

21,000

138,000

Value added tax @ 20%

27,600

Total

165,600

Prior to delivery, JT spent R12,000 preparing a heavy-duty concrete base for the machine.

Calculate the amount that JT should debit to non-current assets for the cost of the machine.