Question
Hurdy Electronics has a financial year end of June 30. The following are transactions related to a new machine it purchasedon July 1, 2013 and
Hurdy Electronics has a financial year end of June 30. The following are transactions related to a new machine it purchasedon July 1, 2013
and subsequent costs and events:
2013 July 1 :
Purchased a new machine. The machine had a recommended Gross retail price of $55,000, but after careful negotiation it was purchased for $51,700(including GST).The delivery of the machine cost $1,650 (inc. GST) and installation was $2,750 (inc. GST). The machine was purchased on credit but the delivery and installation charges were all paid in cash.
The estimated life of the machine is to be 5 years, with an annual depreciation rate of 20% per annum straight line. The residual value has been estimated to be $9,000. In addition, there will be yearly maintenance costs of $1,320 (inc. GST) for the machine.
2014 July 1:
Paid $6,160 cash (inc GST) for the installation of a special device to the machine. The special device improved the machine's productivity, but it was expected that there would be no change to the useful life of the asset, nor the residual value
.
2017 July 1
The management decided to sell the Machine for cash $25 000 (plus GST).
Question: This is the genreral journal of the sale of machinery on 1 July 2017. How to calculate the number 29,400 ?
1 july 2017 Cash 27,500
Accumulated Depreciation Machine 29,400
Machine 48.200
GST Payable 2,500
Gain on disposal 6,200
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