5 6 Question 3 Sentosa Bhd post-closing trial balance at 30 June 2015 included the following balances: RM Machinery control (at cost) 244,480 Accumulated depreciation 113,800 Fixtures (at cost; purchased 2 December 2012) 308,600 Accumulated depreciation - Fixtures 134,138 The Machinery Control and Accumulated Depreciation - Machinery Control accounts are supported by subsidiary ledgers. Details of machines owned at 30 June 2015 are as follows: Machine Acquisition date Cost (RM) Estimated useful Estimated residual value life (years) (RM) 1 28 April 2011 74,600 5 3,800 2 4 February 2013 82.400 4.400 3 26 March 2014 87.480 5.400 Sentosa Bhd uses straight line depreciation for machinery and diminishing-balance depreciation at 20% per annum for fixtures. The following transactions and events occurred from 1 July 2015 onwards: 2015 July 3 Exchanged item of fixtures (having a cost of RM 100,600; a carrying amount at exchanged date of RM56,872; and a fair value at exchange date of RM57,140) for a used machine (Machine 4). Machine 4's fair value at exchange date was RM58,000. Machine 4 originally cost RM92,660 and had bee depreciated by RM31,790 to exchange date in the previous owner's accounts. Sentosa Bhd estimated Machine 4's useful life and residual value to 3 years and RM4,580 respectively. Oct 10 Traded in Machine 2 for a new machine (Machine 5) that cost RM90,740. A trade- in allowance of RM40,200 was received and the balance was paid in cash. Freight charges of RM280 and installation costs of RM 1,600 were also paid in cash. Sentosa Bhd estimated Machine5's useful life and residual value to be 6 years and RM5,500 respectively. 2016 April 24 Overhauled Machine 3 at a cash cost of RM16,910, after which Sentosa Bhd revised its residual value to RM5,600 and extende its useful life by 2 years. May 16 Paid for scheduled repairs and maintenance on the machines of RM2,370. June 30 Recorded depreciation and scrapped Machine 1. Required: Discuss the necessary accounting treatment and prepare journal entries to record the above transactions and events. Page 3 of 5