Exercise 11.24 DEPRECIATION CALCULATION Osamu Ltd operates a factory that contains a large number of machines designed to produce knitted garments. These machines are generally depreciated at 10% p.a. on a straight-line basis. In general, machines are estimated to have a residual value on disposal of 10% of cost. At 1 July 2013, Osamu Ltd had a total of 64 machines, and the statement of financial position showed a total cost of $420 000 and accumulated depreciation of $130 000. During 2013-14, the following transactions occurred: (a) On 1 September 2013, a new machine was acquired for $15000. This machine replaced two other machines. One of the two replaced machines was acquired on 1 July 2010 for $8200. It was traded in on the new machine, with Osamu Ltd making a cash payment of $8800 on the new machine. The second replaced machine had cost $9000 on 1 April 2011 and was sold for $7300. (b) On 1 January 2014, a machine that had cost $4000 on 1 July 2004 was retired from use and sold for scrap for $500 (c) On 1 January 2014, a machine that had been acquired on 1 January 2011 for $7000 was repaired because its motor had been damaged from overheating. The motor was replaced at a cost of $4800. It was expected that this would increase the life of the machine by an extra 2 years. (d) On 1 April 2014, Osamu Ltd fitted a new form of arm to a machine used for putting special designs onto garments. The arm cost $1200. The machine had been acquired on 1 April 2011 for $10 000. The arm can be used on a number of other machines when required and has a 15-year life. It will not be sold when any particular machine is retired, but retained for use on other machines. CHAPTER 11 Property, plant and equipment 3 Required 1. Record each of the transactions. The end of the reporting period is 30 June. 2. Determine the depreciation expense for Osamu Ltd for 2013-14