QUESTION 3 Ignore VAT (20 MARKS; 36 MINUTES) Invaders Ltd recently purchased a cutting machine from one of its suppliers. The machine was purchased on 01 March 2019 and brought into use on 01 May 2019. The financial year end of the company is 28 February. The following costs were incurred relating to the purchase of the machine: Purchase Price Delivery costs Administration costs Import duties (non-refundable) Staff party to celebrate the acquisition of the new machine Testing to ensure that machine is fully operational Installation costs Rand 980 000 15 500 22 000 12.000 18 800 5 500 32 000 The machine has a residual value of R80 000 and will be depreciated using the units of production method. The machine is expected to produce a total of 9 000 000 units over its useful life of 10 years. The following table indicates the number of units produced over a 3-month period: March-May 2019 150 000 units June-August 2019 220 000 units September-November 2019 180 000 units December-February 2020 230 000 units March-May 2020 195 000 units June-August 2020 232 000 units September-November 2020 180 000 units December-February 2021 You are required to: 255 000 units a) Calculate the cost to be capitalised to the machinery account. (6 marks) b) Provide the journal entries for the depreciation for the years ended February 2020 and 2021. 28 (10 marks) c) Prepare an extract of the Statement of Financial Position to reflect the machinery as at 28 February 2021. (4 marks)