Over a 5-year period, Eureka Ltd completed the following transactions affecting non-current assets in financial years ending
Question:
Over a 5-year period, Eureka Ltd completed the following transactions affecting non-current assets in financial years ending 30 June. The company uses straight-line depreciation on all depreciable assets and records depreciation to the nearest month. Ignore GST.
Required:
(a) Prepare journal entries to record all the transaction of Eureka Ltd.
(b) Prepare a schedule showing the cost and accumulated depreciation of each asset after recording depreciation on 30 June 2026.
(c) Post the journal entries in requirement A to the appropriate non-current asset accounts from 1 July 2022 to 30 June 2026.
Transcribed Image Text:
2022 Jul 1 Dec 31 2023 Jun 30 Jul 30 2024 Jun 30 Sep 30 2025 Jun 30 2025 Jul 1 Dec 31 2026 Purchased a new machine for a cash price of $30 000. Freight charges of $700 and installation expenditures of $3200 were paid in cash. The machine has a useful life of 5 years and a residual value of $5000. Purchased a used delivery van for $19 000 cash. The van was repainted at a cost of $1500, a new battery was installed at a cost of $200 and new tyres were installed at a cost of $800. The van has a useful life of 4 years and a residual value of $1500. Recorded depreciation expense on the assets. Paid for day-to-day repairs and maintenance on the machine and van at a cost of $520. Recorded depreciation expense on the assets. Installed a fence around the company property at a cost of $8000. The fence has a useful life of 20 years with no residual value. Recorded depreciation expense on the assets. The company completed construction of a new storage shed. Construction costs incurred (all paid in cash) were: labour, $18 000; materials, $55 000; building permits, $1500; architect fees, $2 300; and overhead, $4000. The storage shed is expected to have a residual value of $7000 and a useful life of 30 years. Overhauled the machine purchased on 1 July 2022 at a cost of $10 000. On completion of the overhaul, management estimated the useful life to be 4 additional years to the current useful life and revised the residual value to $4 000. The parts replaced were considered to have zero carrying amount. June 30 Recorded depreciation expense on the assets.
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Related Book For
Accounting
ISBN: 9780730382737
11th Edition
Authors: John Hoggett, John Medlin, Keryn Chalmers, Claire Beattie
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