During 2016-2017, Winter Ltd. purchased three types of machines. Because of frequent employee turnover in the...
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During 2016-2017, Winter Ltd. purchased three types of machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods have been used. Information concerning the machines is summarised in the table below. Machine Date Initial Initial site Initial delivery Residual Useful Depreciation type acquired cost preparation and assembly value life Method costs costs Diminishing- 1 30/09/2016 $36,300 $1,200 $900 $9,000 8 balance Sum-of- 2 1/02/2017 $25,000 $1,000 $6,000 years'-digits 15/11/2017 $52,500 $700 $800 $10,500 10 Straight-line The end of financial year is at 30 June. The following transactions has taken place since the start of 2018; 2018 Feb. 24 Purchased land and a building worth $145,000, with the intention of tearing down the building and constructing a new office complex. An interest-free loan for $120,000 was taken from another company and the rest was paid in cash, plus an agent's commission of $8,800 and title search fees of $2,750. May 14 Paid Dan's Demolition Services $9,900 to demolish the building acquired on 24 September and received $750, from sale of materials salvaged from demolishing the old building. estimated to be $1,200. The carrying amount of the parts replaced in the machine was considered to be equal to $12,000. Apr. 20 A parking area was paved, on the land purchased at a cost of $30,800. The parking area has a useful life of 8 years with $9,000 residual value. The depreciation method is diminishing balance method. June 30 End of financial year depreciation expenses recorded. Machine number 4 has produced 12,450 units. July 28 Due to high demand for the newly built office complex, management has decided to extend the office complex, by adding four new offices. The extension is to finish by early September 2020, at a cost of $25,600. As the extension will be fully financed through the Commonwealth Bank of Australia, the full cost of the extension is borrowed on this date from the bank and kept in an account called "cash trust", to be used for the project. The extension will increase the useful life of the building by 4 years. Aug. 11 Due to technological advances the company sold machine 2 for $10,000. Sep. 8 The extension work on the office complex was completed. Interest paid on the loan for extension was $2,800. Required Prepare the necessary general journal entries for all the above transactions, rounding to the nearest whole number for the amounts to be recorded. Depreciation calculations must be based on the dates provided (no rounding to the nearest month). Narrations are not required. Instructions: You are required at least, to have a sheet in excel for General journal entries Workings and calculations (including any relevant T accounts and depreciation rate calculation). Depreciation schedules for each depreciable asset (this could be on a separate sheet or part of the above sheet). During 2016-2017, Winter Ltd. purchased three types of machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods have been used. Information concerning the machines is summarised in the table below. Machine Date Initial Initial site Initial delivery Residual Useful Depreciation type acquired cost preparation and assembly value life Method costs costs Diminishing- 1 30/09/2016 $36,300 $1,200 $900 $9,000 8 balance Sum-of- 2 1/02/2017 $25,000 $1,000 $6,000 years'-digits 15/11/2017 $52,500 $700 $800 $10,500 10 Straight-line The end of financial year is at 30 June. The following transactions has taken place since the start of 2018; 2018 Feb. 24 Purchased land and a building worth $145,000, with the intention of tearing down the building and constructing a new office complex. An interest-free loan for $120,000 was taken from another company and the rest was paid in cash, plus an agent's commission of $8,800 and title search fees of $2,750. May 14 Paid Dan's Demolition Services $9,900 to demolish the building acquired on 24 September and received $750, from sale of materials salvaged from demolishing the old building. estimated to be $1,200. The carrying amount of the parts replaced in the machine was considered to be equal to $12,000. Apr. 20 A parking area was paved, on the land purchased at a cost of $30,800. The parking area has a useful life of 8 years with $9,000 residual value. The depreciation method is diminishing balance method. June 30 End of financial year depreciation expenses recorded. Machine number 4 has produced 12,450 units. July 28 Due to high demand for the newly built office complex, management has decided to extend the office complex, by adding four new offices. The extension is to finish by early September 2020, at a cost of $25,600. As the extension will be fully financed through the Commonwealth Bank of Australia, the full cost of the extension is borrowed on this date from the bank and kept in an account called "cash trust", to be used for the project. The extension will increase the useful life of the building by 4 years. Aug. 11 Due to technological advances the company sold machine 2 for $10,000. Sep. 8 The extension work on the office complex was completed. Interest paid on the loan for extension was $2,800. Required Prepare the necessary general journal entries for all the above transactions, rounding to the nearest whole number for the amounts to be recorded. Depreciation calculations must be based on the dates provided (no rounding to the nearest month). Narrations are not required. Instructions: You are required at least, to have a sheet in excel for General journal entries Workings and calculations (including any relevant T accounts and depreciation rate calculation). Depreciation schedules for each depreciable asset (this could be on a separate sheet or part of the above sheet).
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SOLUTION JOURNAL ENTRIES DATE PARTICULARS AMOUNT AMOUNT 30916 1ST MACHINE ACDR363001200900 38400 TO CASH 38400 1217 2ND MACHINE ACDR 250001000 26000 T... View the full answer
Related Book For
Financial Accounting Tools for business decision making
ISBN: 978-0470534779
6th Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
Posted Date:
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