a$)$

$(8$ Marks$)$

Identify the cost $($to be capitalised$)$ of the following items related to

acquisition of property, plant and equipment according to the provision of

IAS $16.$

i$.$ An automobile manufacturer paid $1,800,000$ for steel cold$-$rolling

machine, $150,000$ for delivery to the factory premises and $450,000$

for having it installed. Start$-$up costs, including material wastage

amounted to $300,000.$

ii$.$ For constructing the student's residential block, university of Venus

paid $3,500,000$ to the contractor, $500,000$ to the architect, $1,500$

for planning permission and $2,500$ as a legal expense. $50,000$ of

the architect's fee was for a design that was discarded when the

original design was altered by university estate department.