accounting questions
NON-CURRENT ASSETS Lomani Ltd acquired two new machines for cash on 1 January 2017. The cost of machine A was $400 000, plus GST, and of machine B, $600 000, plus GST. Each machine was expected to have a useful life of 10 years, and residual values were estimated at $20 000 for machine A and $50 000 for machine B. Because of technological advances, Lomani Ltd decided to replace machine A. It traded in machine A on 31 March 2021 for a new machine, C, which cost $420 000. A $200 000, plus GST, trade-in was allowed for machine A, and the balance of machine C's cost was paid in cash. Machine C was expected to have a useful life of 8 years and a residual value of $20 000. On 2 July 2021, extensive repairs were carried out on machine B for $66 000 cash. Lomani Ltd expected these repairs to extend machine B's useful life by 4 years and it revised machine B's estimated residual value to $19 500. Machine B was eventually sold on 1 April 2023 for $300 000, plus GST, cash. On 1 July 2023, Lomani Ltd decided to use the revaluation model for valuation of Machine C. The fair value of Machine C was assessed to be $220 000 and the future useful life was estimated to be 5 years, residual value remains the same. Lomani Ltd uses the straight-line depreciation method, recording depreciation to the nearest whole month. The end of the reporting period is 30 June. Required: Prepare general journal entries to record the above transactions and depreciation journal entries required at the end of each reporting period up to 30 June 2024. Narrations not required. Account for GST 10%. Page 1 of 2 1. \"Businesses from all walks of life are haemorrhaging cash as the COVID-19 pandemic sweeps the globe.\" This statement is mentioned in the required reading, explain what the statement above means in terms of its impact on 'cash flows' to be generated from operating, investing and financing activities. You may use a relevant example from your own community to answer this question and supported with evidence from the required reading. 2. Explain the impact on cash flows of a build-up in inventory during this pandemic and how can companies mitigate the financial impact. Support your answer with evidence from required reading. 3. \"For those brave enough to act effectively now to stabilise and protect your business and maintain liquidity, opportunity will come.\" Explain whether the Statement of Cash Flows is able to illustrate the 'liquidity' of an entity to its users and provide ONE recommendation how companies can maintain liquidity during this pandemic
