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Deens Ltd bought a machine on 1 January 2018 for N$1 600 000. The machine has to be inspected every 6000 hours which means a major inspection will be carried out every 2 years. The estimated cost of the major inspection is N$ 150 000. The machine has a useful life of 8 years.
Question 1: Calculate depreciation and carrying amount of the machine for 2018 and 2019 if everything goes according to plan.
Question 2: If due to several factors, the inspection needed to be done after 18 months instead of 2 years and the cost of the major inspection amounted to N$ 200 000. Show how this matter will be disclosed in PPE note for the year ended 31 December 2019. Machine is the only asset of the entity
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