QUESTION 1 (25 Marks: 45 minutes) Hold on Limited is a breakfast cereal producer and distributor company that has recently acquired a very reputable and popular brand of cereal. Through the companys market research, the brand is expected to derive enormous value for the company, especially as the company has now opted to not only sell the brand of cereal locally, but internationally to South Africa, Botswana and Mozambique as well. The company has a sophisticated and functional distribution and logistics network to assist with the distribution of this cereal. As part of the production of this new brand of breakfast cereal, the company purchased a machine for N$ 1 200 000 cash. The machine was delivered on the same day as the payment was made. It is expected to be used over a five year period to produce the already profitable brand of cereal. At the end of the five years, it is expected that the machine will be scrapped and thus has a zero residual value. Required: Discuss with reference to the Conceptual Framework, how the purchase of the machine should be recognized and measured. Your answer should include a discussion as to whether the machine should be recognized as either an asset or an expense. (15 marks)