Bold Ltd purchased machinery on 1 January 2021 at a cast of R1 200 000. A major inspection has to be carried out on the machinery every three years. The last inspection performed on the machine was on 31 December 2020 by the selle and the inspection costs were included in the purchase price. On the acquisition date, the present value of future expected inspection costs to be incurred was estimated at an amount of R240 000. On the acquisition date the estimated useful life of 10 years was allocated to the machine. The inspection component is part of the machine and not a separate asset The carrying amount of the machinery (including the inspection component) for the year ended 31 December 2021 1. R1 124 000 O2 R1 000 000 O3 R1 056 000 4. R1 024 000
Bold Ltd purchased machinery on 1 January 2021 at a cast of R1 200 000. A major inspection has to be carried out on the machinery every three years. The last inspection performed on the machine was on 31 December 2020 by the selle and the inspection costs were included in the purchase price. On the acquisition date, the present value of future expected inspection costs to be incurred was estimated at an amount of R240 000. On the acquisition date the estimated useful life of 10 years was allocated to the machine. The inspection component is part of the machine and not a separate asset The carrying amount of the machinery (including the inspection component) for the year ended 31 December 2021 1. R1 124 000 O2 R1 000 000 O3 R1 056 000 4. R1 024 000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Bold Ltd purchased machinery on 1 January 2021 at a cast of R1 200 000. A major inspection has to be carried out on
the machinery every three years. The last inspection performed on the machine was on 31 December 2020 by the selle
and the inspection costs were included in the purchase price. On the acquisition date, the present value of future
expected inspection costs to be incurred was estimated at an amount of R240 000. On the acquisition date the
estimated useful life of 10 years was allocated to the machine. The inspection component is part of the machine and
not a separate asset
The carrying amount of the machinery (including the inspection component) for the year ended 31 December
2021
1. R1 124 000
O2 R1 000 000
O3 R1 056 000
4. R1 024 000
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