Question - Fistral Ltd acquires a blank-making machine - blanks are the inner foam core of a surfboard - for the following amounts:

Initial price paid to the supplier $70000

Cost to deliver the machine to the site $5000

Amount to paint the company name on the machine $1500

Amount paid to an engineer to fit the machine ready for work $35000

Insurance cover taken out on the machine $2200

Repairs made to replace bolts which had dislodged during transit $500

Required:

(i) Calculate the value of the machine for depreciation purposes. Explain your reasons for including or excluding certain items in the calculation.

(ii) Choose a method of depreciation taking into consideration the impact of each available method on yearly profits.

(iii) Discuss when and why you might consider revaluing this asset.