Mr Chukwuemeka Obi recently qualified as a Chartered Accountant and has just been appointed as the Finance Manager of Kano Textile Mills Limited (KTML), a manufacturing company. On reviewing the company's accounting records for the year ended 31 December 2023, he discovered the following: (i) KTML purchased a weaving machine on 1 January 2020 for N36,000,000. The machine was being depreciated at 10% per annum on the straight-line basis with no residual value. On 1 January 2023, the machine was sold for N22,000,000 cash. The bookkeeper recorded only the cash receipt by debiting the bank account and crediting the machinery account with N22,000,000. No other entries were made. (ii) On 1 October 2023, KTML acquired a second-hand industrial loom for N8,400,000. The company incurred the following additional costs: - Freight and insurance to bring the loom to the factory: N600,000 - Installation and testing costs: N900,000 - Staff training costs on how to operate the loom: N450,000 - General administrative overhead allocated to the acquisition: N300,000 The loom is expected to have a useful life of 10 years and a residual value of N900,000. KTML uses the straight-line method and depreciates assets on a pro-rata (time-apportioned) basis. (iii) KTML's accounting policy note states: 'Land and buildings are carried at revalued amounts. All other property, plant and equipment are carried at cost less accumulated depreciation and impairment losses.' Required: (a) Identify and correct the bookkeeper's error in recording the disposal of the weaving machine. Show all journal entries required and calculate the correct gain or loss on disposal. (10 marks) (b) Calculate the cost of the industrial loom to be capitalised in accordance with IAS 16 and determine the depreciation charge for the year ended 31 December 2023. Briefly explain why each cost item is included or excluded. (10 marks) Total: 20 marks