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Find depreciation and check if there is a mistake before it Gigi Ltd bought a machine on credit on April 25, 2020 with a value
Find depreciation and check if there is a mistake before it
Gigi Ltd bought a machine on credit on April 25, 2020 with a value of 4 000, 300 of transportation costs, 200 of non-deductible tax costs and 500 of decuctible tax costs. The the machine was first used the 1st of May. The total useful life of the machine is estimated at 30 years and the depreciation method is the straight-line method. The closing date is the 31 of december 2021. a. Identify the accounting entry attached to this transaction? b. What will be the amount of depreciation at the closing date (considering that each month of the year = 30 days and a year = 360 days? a. The main transaction is a purchase of a non current asset so we need to credit the account "machine" for 4000 , impacting the balance sheet). This purchase on credit induces the creation of an equity represented by a increase impacting the income statement throught the debitside. b. The amount of depreciation at the closing date will beStep by Step Solution
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