On 18 August 2024, J. Barton purchased a new machine from DelFalco Ltd. Barton paid the following

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On 18 August 2024, J. Barton purchased a new machine from DelFalco Ltd. Barton paid the following amounts in relation to this acquisition:

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Barton was able to negotiate a trade discount of 15% on the list price of the machine as well as a settlement discount of 2% if payment was received within 21 days of purchase. Barton paid for the machine on 4 September 2024.
Required:

(a) How will the above information be treated in the financial statements of J. Barton?

(b) ‘Materiality’ is a concept that sometimes has an impact on the capitalisation of amounts in the balance sheet. Explain why this is the case and illustrate your answer with an example.

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