Question 3 On 1 January 2013 Delta acquired a specialized machine for its production department The available information is as follows GHC List price of machine 9,200,000 Freight charges 263,000 Electrical installation cost 245,000 Staff training for use of machine 351,000 Pre production testing 193,000 Purchase of a three year maintenance contract 528,000 Estimated residual value 175,000 Trade discount on list price 5 Early settlement discount taken 3 Estimated life (in machine hours) 12,000 Machine hours used during the years ended 31 December 2013, 2014 and 2015 were 2000, 3200 and 1400 respectively On 1 January 2015 Delta decided to upgrade the machine by adding new components at a cost of GHC 1,753,000 This upgrade led to a reduction in the production time per unit of goods being manufactured by the machine The upgrade also increased the estimated remaining life of the machine at 1 January 2015 to 8,000 machine hours and its estimated residual value to GHC 350,000 Required For the years ended 31 December 2013, 2014 and 2015, compute the relevant amounts to be included (under each head) in the income statement and statement of financial position

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Question 3 On 1 January 2013 Delta acquired a specialized machine for its production department. The available information is as follows: GHC List price of

Question 3

On 1 January 2013 Delta acquired a specialized machine for its production department. The available information is as follows: GHC

List price of machine 9,200,000

Freight charges 263,000

Electrical installation cost 245,000

Staff training for use of machine 351,000

Pre-production testing 193,000

Purchase of a three-year maintenance contract 528,000

Estimated residual value 175,000

Trade discount on list price 5%

Early settlement discount taken 3%

Estimated life (in machine hours) 12,000

Machine hours used during the years ended 31 December 2013, 2014 and 2015 were 2000, 3200 and 1400 respectively.
On 1 January 2015 Delta decided to upgrade the machine by adding new components at a cost of GHC 1,753,000. This upgrade led to a reduction in the production time per unit of goods being manufactured by the machine. The upgrade also increased the estimated remaining life of the machine at 1 January 2015 to 8,000 machine hours and its estimated residual value to GHC 350,000.

Required:

For the years ended 31 December 2013, 2014 and 2015, compute the relevant amounts to be included (under each head) in the income statement and statement of financial position.