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Brennan has been in business for many years, and her accounting year end is the 31 December each year. On the 1st July 20X5 she
Brennan has been in business for many years, and her accounting year end is the 31 December each year.
On the 1st July 20X5 she purchased a machine for €2,400. The estimated useful life on this machine is five years, with an estimated residual value of €300. Brennan provides for depreciation on a monthly basis using the straight-line method. Brennan then sold the machine on the 1st of April 20X7 for €1,800.
Show the effect of the above transactions in the relevant accounts and on the financial statements for each year.
On the 1st July 20X5 she purchased a machine for €2,400. The estimated useful life on this machine is five years, with an estimated residual value of €300. Brennan provides for depreciation on a monthly basis using the straight-line method. Brennan then sold the machine on the 1st of April 20X7 for €1,800.
Show the effect of the above transactions in the relevant accounts and on the financial statements for each year.
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Year 20X5 Purchase of the machine Debit Machine Fixed Asset 2400 Credit CashBank or Accounts Payable ...
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Financial Accounting and Reporting a Global Perspective
Authors: Michel Lebas, Herve Stolowy, Yuan Ding
4th edition
978-1408066621, 1408066629, 1408076861, 978-1408076866
