Good evening,

Could please let me in working out the highlighted sections?

Thank you in advance!

Quest Ltd's reporting period ends on the 30th June and they use straight line depreciation. The entity purchases machinery on 31st October 2017 for an invoice price of $50,000 plus GST. Additional costs included delivery costs of $1,500 plus GST, extended warranty costs for 3 years of $950 plus GST, installation and wiring $2,000 plus GST. The estimated useful life of the machine is 7 years with a residual value of $3,500. The company sold the machinery on the 30th June 2021 for $1,500. REQUIRED: Prepare the general journal entries to record: i) The acquisition of the machine on 31 October 2017 ii) The depreciation expense for the first six months of 2021; iii) The sale of the machine on 30 June 2021. Debit Credit General Journal Date Account 31/10/17 Equipment GST Clearing Cash 53,500 5,350 58,850 30/06 3,571 Depreciation ([53,500-3,500]/7/2) Accumulated depreciation 3,571 30/06 Cash Accumulated depreciation Loss on sale Equipment 1,500 26,190 25,810 ............................ 53,500