Please the answer sheet attached INTERIM ASSESSMENT The components of the cost of a major item of equipment are given below. GHS Purchase price 780,000 Import duties 117.000 VAT (refundable) 78.000 Site preparation 30.000 Installation costs 28,000 Pre-production costs 18,000 Initial operating losses before the asset reaches planned performance 50,000 Estimated cost of dismantling and removal of the asset, recognized as a provision under IAS 37 Provisions Contingent Liabilities and Contingent Assets 100,000 1.200.000 In accordance with IAS 16 Proper Plant and Equipment, what amount should be recognized as the cost of the asset? B GHS 956,000 GHS 1,055,000 GHS 1,073.000 GHS 1,201,000 D 2 According to IAS 16 Property: Plan and Equipment, which, if any of the following statements about depreciation are correct? The main purpose of depreciation is to reflect the fall in value of an asset over its useful life When an asset is tevaluod, subsequent depreciation relating to the amount of the revaluation should be debited to the revaluation surplus rather than to the income statement The provision for depreciation ensures that there are funds available to replace an asset when this becomes necessary. though in times of inflation, additional amounts may need to be set aside A change in depreciation method constitutes a change in accounting policy and must be accounted for as such B (1) and (4) (2) and (3) (4) only None of the statements is correct D 3 Mario Ltd purchased a machine for GHS 50,000 on January 20X1. The machine was judged to have a five-year life with a residual value of GHS 5,000. During 20x3, the market for the product declined and the machine was sold on January 20X4 for GHS 7.000 According to IAS 16 Property, Plant and Equipment, what was the loss on disposal? B GHS 27,000 GHS 13,000 GHS 16,000 GHS 23.000 D