Question: please do it within 30 minutes ... Quorum Ltd owns and operates an item of machinery. At 1 October 2019 the machinery had a carrying

please do it within 30 minutes ...

Quorum Ltd owns and operates an item of machinery. At 1 October 2019 the machinery had a carrying value of R700 000. The original cost was R1 400 000 and accumulated depreciation was R700 000. The machinery is depreciated at a rate of 12.5% per annum on a straight line basis. On 1 February 2020 the machinery sustained some damage after an incident in the factory. An assessor has inspected the machinery and determined that the estimated value in use of the machinery is now R500 000. The current disposal value after costs of the machinery is R350 000 and tradein value (only in the event of an upgrade) is R550 000. The company still considers the machinery to be functional and is not considering an upgrade at the moment. Calculate the recoverable amount of the plant on 1 February 2020.

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