7000 AY07/08 Main Exam 04-The Top Restaurant (Ignore GST) Temasek Polytechnic 3000 The Top Restaurant had the following account balances as at 1 January 20X7: -Equipment, at cost -Accumulated Depreciation 5 5,200 $12,000 1.008 The restaurant traded in an old oven costing $3,000 (hought on 1 January 20X5) for a new one on 1 Augast 20X7 The new oven cost $5,000; transportation cost charged was $50. The restaurant incurred another $250 to prepare the site where the oven was to be installed and expenses involved in testing the oven prior to use amounted to $100. Monthly maintenance expense of the oven is $200. Trade-in allowance given by the vendor for the old oven was $500. The restaurant settled fully the balance of $5,100 (including the first month maintenance expense for August 20X7) on 1 August 20X7. All equipment, including ovens, is depreciated on a straight line basis over a useful life of 5 years. Residual value is considered to be insignificant. Financial year ends on 31 December, Required: (a) Determine the cost of the new oven (show clearly the breakdown of expenditure items that constitute 'cost'). 5.00 +50+100+250 = 5,400 Prepare the following accounts for the year ended 31 December 20X7 (showing all necessary workings): (i) Equipment, at cost Accumulated Depreciation - Equipment Disposal-Equipment (ii) (iii) Workings: 1/1 2015 00 3000 236 TRIO KO 5400