Sorocaba Company is located in a highly inflationary country and in accordance with IAS 29 prepares financial statements on a general purchasing power (inflation-adjusted) basis through reference to changes in the general price index (GPI). The company had the following transactions involving machinery and equipment in its first two years of operations:

Required:
Determine the amount that would be reported as machinery and equipment in accordance with IAS 29 on the December 31, Year 1, and December 31, Year 2, balance sheets.

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Date January 15, Year1 March20, Yea October 10, Year 1 December 31, Year 1 Aprl 15, Year2 December 31,Year2 Transaction Cost $20,000 55,000 130,000 Useful Life GPI 4years 100 5 years 110 10 years 130 140 160 180 Purchase Machine X Purchase Machine Y Purchase Machine Z Sold Machine X