Khoza Bazaar Ltd (Khoza), as well as all of their suppliers, are registered as vendors in accordance with the VAT-Act. VAT is charged at 15%. Khozas current reporting date is 31 December 20.7. The machinery account in the general ledger of Khoza reflected a debit balance of R1 972 000 on 1 January 20.7 before the below purchase transaction took place. On 25 April 20.7, Khoza entered into a purchase contract with SA Entity for the purchase of an additional machine. The purchase agreement included inter alia the following stipulations: The cost price of the machine is R1 442 100 (including VAT) and is payable within 25 days after delivery. Right of ownership of the machine transfers to Khoza, as soon as the machine is loaded onto a special truck at the premises of SA Entity. Delivery of the machine by SA Entity to the premises of Khoza has to take place on or before 7 June 20.7. The cost of the delivery of the machine to the premises of Khoza is for the account of Khoza. The legal costs in respect of the contract are also for the account of Khoza. The following transactions/events relate to the abovementioned purchase contract: 1. On 26 April 20.7, the purchase contract was signed and the account for the drafting of the contract, to the amount of R16 790 (including VAT) was handed to Khoza. These legal fees were paid on 26 April 20.7 by means of an electronic fund transfer. 2. On 3 June 20.7, the machine was loaded onto a special truck, at the premises of SA Entity. On 5 June 20.7, the machine was delivered to the premises of Khoza. The invoice price was paid on 30 June 20.7. 3. The delivery costs amounted to R64 975 (including VAT) paid on the date of delivery to the premises of Khoza. 4. Khozas engineer and maintenance personnel were responsible for the installation of the machine as well as the performance of the test runs. The costs in this regard, are as follows: The portion of the internal staffs remuneration, attributable to the installation and the test runs, amounted to R43 000 and was debited to the employee benefits expense account as part of the June 20.7 payroll (paid on 30 June 20.7). Maintenance expenses amounted to R6 000 (excl. VAT) and was completed on 25 June 20.7. Material used during the test runs amounted to R14 000 and were transferred from the material inventory accounting on 26 June 20.7. The training of the three operators of the machine was performed by an external consultant on 27 and 28 June 20.7. The invoice amount of R18 240 (including VAT) was paid on 28 June 20.7. 5. On 30 June 20.7, the health inspector of the local authority inspected the machine and confirmed that everything was in order. There are no costs in this regard to Khoza. 6. On 1 July 20.7 the machine was available for use in the manner intended by the owner. 7. As from 1 July 20.7 to 31 July 20.7 the employees of Khoza, who are members of the Metal Workers Union, went on strike. Consequently, the machine was put into service only on 1 August 20.7. REQUIRED: a) Open the machinery account, with the stated balance as at 1 January 20.7, in the records of Khoza. Recognise the elements of the cost price of the new machine acquired by Khoza, by making separate entries directly into the machinery account. The date order of the transactions is important and if transactions are not completed in the correct order, they will be marked incorrectly. Note: The correct date as well as the correct name of the contra account must be provided in respect of each entry and marks will only be provided if the date, account and amount are all correct. b) Indicate and motivate briefly from which date the depreciation on the new machine has to be written off.