Question $3$

Cyclone Ltd acquired a manufacturing machine on $1$ October $202$ and since acquisition the following expenses regarding the machine was incurred:

Purchase price

Transport and delivery costs

Installation costs

Sundry pre$-$production costs

Cost of testing and samples

Estimated annual operating expenses of machine

Estimated annual operating cash inflow from machine

Useful life

R$700000$

R$16000$

R$3000$

R$23100$

R$32400$

R$141200$

R$266700$

$5$ years

Page $2q,$

$q,-$

Impairment of Assets

LU $3$

Depreciation

$20\%$ pa over useful life

Disposable value $/$ residual value at the end of useful life

R$246500$

Disposable value on $31$ December $20$x$4$

R$500000$

Additional information

The samples made as a trial run were sold to the public for R$28000.$

The company's tax rate is $27\%$ and it is using an after$-$tax discount rate of $10\mathrm{.}26\%.$ The company is registered for VAT.

The machine was put into production on $1$ October $202$ and during the first year the operating expenses exceeded operating income.

The machine was extensively damaged due to the flooding of the plant in September $204$ and it is the opinion of the engineer that the production capacity of the machine has been negatively affected.

REQUIRED

Disclose the following notes to the financial statements of Cyclone Ltd for the financial year ending $31$ December $20$x$4$ in accordance with IFRS:

Property, plant and equipment

Profit before tax

Impairment loss

Note: Ignore comparative figures