Question 1 Harris Ltd. exchanged a parcel of land with a carrying value of $15 million and fair value of $20 million, for some highly specialized machinery from Biden Corp. In addition, Harris Ltd. also paid $5 million along with the land in a transaction holding commercial substance to obtain the machinery. Required: What will be the cost of the specialized machinery in the financial statements of Harris Ltd.? 3 marks ii. Harris Ltd also recently imported an artificial intelligent machinery and incurred the following costs: 480,000 5,500 25,000 List price (trade discount 12.5% on list price) Haulage costs Pre-production testing of machinery Repair & maintenance contract for three years Running of electrical cable for machinery Special foundation for mounting machinery Labor costs (direct) 48,000 28,000 9,000 15,000 Harris Ltd paid for the machinery within four weeks of the order, therefore, obtained an early settlement discount of 3%. Question 1 Harris Ltd. exchanged a parcel of land with a carrying value of $15 million and fair value of $20 million, for some highly specialized machinery from Biden Corp. In addition, Harris Ltd. also paid $5 million along with the land in a transaction holding commercial substance to obtain the machinery. Required: What will be the cost of the specialized machinery in the financial statements of Harris Ltd.? 3 marks ii. Harris Ltd also recently imported an artificial intelligent machinery and incurred the following costs: 480,000 5,500 25,000 List price (trade discount 12.5% on list price) Haulage costs Pre-production testing of machinery Repair & maintenance contract for three years Running of electrical cable for machinery Special foundation for mounting machinery Labor costs (direct) 48,000 28,000 9,000 15,000 Harris Ltd paid for the machinery within four weeks of the order, therefore, obtained an early settlement discount of 3%. Harris Ltd had wrongly specified the power loading of the original electrical cable to be installed by the contractor. The cost of rectifying this error of $12,000 is included in the above figure of $28,000. The machinery is expected to have a useful life of 20 years. At the end of this period there will be compulsory costs of $30,000 to dismantle the machinery and $6,000 to restore the site to the original condition Required: Determine the capitalized value of the artificial intelligent machinery in the financial statements of Harris Ltd. Explain the treatment in the financials to be given to any cost or item not utilized in computing the capitalized value of the machinery. 15 marks