Muscato Ltd acquired a new juicing machine for cash on 1 March 20X2. The price of the machine was $35 000, but Muscato Ltd received a discount of 1% for early payment. In addition, Muscato Ltd paid $200 for the delivery of the machine and $300 for installation. The machine was expected to have a useful life of 10 years with a residual value estimated at $8 000.

On 2 August 20X3, extensive repairs were carried out on the machine for $12 000 cash. After these repairs were undertaken Muscato Ltd expected that the machine has remaining useful life of 11 years and it revised its estimated residual value to $11 000. The machine was eventually sold on 1 May 20X5 for $20 000 cash.

Muscato Ltd uses the straight-line depreciation method, recording depreciation to the nearest whole month. The end of the reporting period is 30 June. Ignore GST.

Prepare relevant journal entries for 2 August 20X3. Show your calculations.

Prepare journal entries to record depreciation of the machine on 30 June 20X4. Show your calculations.

Prepare journal entries to record the sale of the machine on 1 May 20X5. Calculate the profit or loss Muscato Ltd made with the sale of the machine. Show your calculations.