Question
can you please answer in 15 minutes Brooklyn Pty Ltd is a leading manufacturer of products from Australian recycled and reclaimed materials. On 1 January
can you please answer in 15 minutes
Brooklyn Pty Ltd is a leading manufacturer of products from Australian recycled and reclaimed materials. On 1 January 20X1, Brooklyn Pty Ltd purchased a new extruding machine to be used in the manufacture of water storage tanks constructed from new and recycled plastics. The purchase of this machine would allow the company to expand the range of water tanks they supplied to their customers.
Expenditures made by the company the company on 1 January 20X1 included the following:
$250,000 to purchase the machine from the supplier
$12,000 to build a concrete structure to provide support for the machine and allow it to operate in the manner intended.
$1,000 to make minor adjustments required on installation for it to work properly.
$2,000 to install a dedicated power supply to the machine.
$4,000 on informing their customers that, as a result of acquiring the new machine, they would be able to supply a greater range of water tanks for them to purchase.
At acquisition, Brooklyn Pty Ltd estimated the machine to have a useful life of 5 years, and a residual value of $55,000. It was expected that the economic benefits from using the machine will be received evenly over its useful life.
On 1 September 20X1 Brooklyn Pty Ltd paid $1,500 for general repairs and maintenance for the machine.
On 1 November 20X2, the machine was sold for $180 000.
Brooklyn Pty Ltd has a balance date of 30 June. Ignore GST.
Required:
(i) In the area below calculate the cost of the machine at 1 January 20X1. Show all workings.
Required:
(ii) Refer to the information in the above question, and in the area below, record all General Journal entries for Brooklyn Pty Ltd to account for the above transactions from 1 January 20X1 to 1 November 20X2.
Show all workings. Narrations are required to be included.
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