Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

3.3 The construction manager indicated that delivery costs for Machine B (in question 3.2 above) will amount to R15 600 and installation costs will

image text in transcribed

3.3 The construction manager indicated that delivery costs for Machine B (in question 3.2 above) will amount to R15 600 and installation costs will amount to R36 000. I need to tell her where to record these costs and why. Am I correct in saying these costs should be debited to the delivery expenses and installation expenses accounts in the general ledger? Please indicate whether or not I am correct, in either case please be clear as to HOW these costs should be treated and why they should be treated in (5 Marks) this way. 3.4 On 1 October 2011, Building Together Pty (Ltd) purchased an eight-wheeler truck for delivery of sand and stone. The truck was ready for use on the purchase date. The truck had a purchase price of R870 000 and a residual value of R160 000 and was expected to be used evenly over 6 years. On 28 February 2013, the business purchased and installed an additional unit to the truck that sweeps excess stone and sand off the back of the truck. The total cost of the unit (including installation) amounted to R195 000. It is expected that the new unit will be disposed of on the same date as the truck. The new unit has a residual value of R35 000. Please calculate the depreciation expense for the year ended 31 July 2014. (5 Marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Financial Accounting

Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac

14th edition

130565353X, 978-1305887510, 1305887514, 978-1305653535

More Books

Students also viewed these Accounting questions

Question

L A -r- P[N]

Answered: 1 week ago