find depreciation expense and the payment of the loan with working.

B. Show how the assets would be reported on the 31 December 2015 balance sheet.

End of Chapter Problem 14.5 On 2 January 2015, Powerhouse Ltd purchased, by exchanging $282,000 cash and a $169,000, 12%, 18-month finance company loan, assets with the following independently determined appraised values: Appraised value Building $320,000 Land 80,000 Machinery and equipment 100,000 $500,000 The estimated useful life of the building is 30 years and its residual value is $19,000. The $100,000 machinery and equipment amount consists of three machines independently valued at $31,000 each and some office equipment valued at $7,000. The estimated useful lives and residual values for these assets are: Useful life Residual value Machine 1 ars $3,100 Machine 2 9 years 3,200 Machine 3 4 years 4,200 Office equipment 5 years 500 Powerhouse Ltd uses the straight-line depreciation method. Ignore GST. 3. Depreciation expense for the year 2015. Powerhouse Ltd General journal (extract) Credit Date Particulars Debit 2015 Dec. 31 Depreciation expernse Accumulated depreciation - building machinery Accumulated depreciation office equipment Accumulated depreciation (To record annual depreciation) 4. The payment of the loan on 2 July 2016 Powerhouse Ltd General journal (extract) Date Particulars Debit Credit 2015 Dec. 31 Loan from finance company Interest expense Interest payable Cash at bank (To record repayment of loan plus interest)