QUESTION $1(42$ marks$)(76$ minutes$)$

$$

Ndiza Ltd $($Ndiza$)$ is a South African airline company with a footprint across the African continent. The company is the fastest growing airline brand globally and the leading aviation group in Africa. Currently, Ndiza operates more than $145$ ultra$-$modern and environmentally friendly aircrafts. Living its motto of bringing Africa together, Ndiza has created much needed intra$-$Africa and transcontinental air connectivity network. Ndiza is listed on the Johannesburg Securities Exchange $($JSE$)$ and has a $31$ October year end.

$$

The following relates to some of the transactions, assets & liabilities of Ndiza for the year ended $31$ October $2024$:

$1.$ Acquisition of the High$-$Performance Computing Server

$$

On $1$ January $2023,$ Ndiza acquired an in$-$house High$-$Performance Computing server $($HPC server$)$ to aid in the development of a flight tracking application called the Vaya app, detailed below. The HPC server would be used to securely store, process and transmit flight data used by the Vaya app from the date that the server is ready for use as intended by management.

$$

The HPC server was purchased from China for a price of R$6500000.$ Ndiza incurred R$300000$ for the delivery of the HPC server to its head office in Kempton Park. The server was successfully installed on $1$ February $2023$ at a cost of R$1500000.$ All costs relating to the server were paid on the dates they were incurred. The HPC server was ready for use as intended by management on $1$ February $2023$ and on that date, management determined that the server had an estimated useful life of $5$ years and an insignificant residual value. On $1$ November $2023,$ management revised the remaining useful life of the HPC server to $6$ years and the residual value to R$800000.($a$)$Write a memorandum to the Chief Financial Officer $($CFO$)$ advising her on the correct classification and measurement of the High$-$Performance Computing Server in the accounting records of Ndiza Ltd as at $30$ June $2024.$

$$

$$ Support your discussion with calculations where necessary.

$$

Communicationmark$$PresentationCommunicationmark$$Logicalargument