Answered step by step
Verified Expert Solution
Question
1 Approved Answer
At the end of the 2 0 2 3 financial year, Scallion Ltd identified the following items that need to be resolved before financial statements
At the end of the financial year, Scallion Ltd identified the following items that need to be resolved before financial statements are prepared. GST has been correctly accounted for on these noncurrent asset transactions.
On st July Scallion Ltd purchased a used machine for $ cash. The cost was debited to the Machinery account in the ledger. Prior to use, additional expenses were incurred for installing and testing the machine. These costs amounted to $ and were debited to the repairs and maintenance expenses account. The installation and testing was completed on st October and the machine was brought into use on that date. The machine has an estimated useful life of years, with a residual value of $ Scallion uses straightline depreciation for machinery and records depreciation to the nearest month. No depreciation has yet been provided in respect of this asset in the current year.
On nd July a small building and land were purchased for $ The purchase price was determined by appraisers based on a fair value of $ for the land, and $ for the building. The total purchase consideration of $ was debited to the land account. The building has an estimated useful life of years with no residual. Scallion uses straight line depreciation for buildings. No depreciation has yet been provided for the building in the current year. On June Scallion decided to adopt the revaluation model and to measure its land and buildings at fair value in the balance sheet. A valuation was carried out on June and the land was valued at $ and the building was valued at $ No entries have yet been passed in relation to these fair values. The fair value of the land and retail store acquired on nd June had not changed.
A new truck was purchased on st March Scallion Ltd paid cash of $ The truck has an estimated useful life of years with a residual value of $ and is to be depreciated using the reducing balance method using a rate of times the straightline rate No depreciation has yet been provided in respect of this asset in the current year.
REQUIRED:
Prepare any adjusting or correcting entries required as at June in relation to the additional information provided above.
Any entries necessary in respect of depreciation for each class of noncurrent assets discussed in the information given for the year ended June
Scallion Ltd uses the allowance method of accounting for bad debts. One percent of net credit sales is estimated to be uncollectable for the year ended June round amount upward to nearest whole $ On June, Scallion Ltd was notified by the lawyers of Croft Ltd that they had been declared bankrupt and were unable to pay the amount owing. This debt was subsequently written off.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started