Question
Part A - Burleigh Brews Pty Ltd purchased a new packaging machine on 1 September 2022 at a total installed cost of $205,150 (GST Inclusive).
Part A - Burleigh Brews Pty Ltd purchased a new packaging machine on 1 September 2022 at a total installed cost of $205,150 (GST Inclusive). The production manager of Burleigh Brews Pty Ltd estimated that the machine has a residual value of $25,000 (excluding GST). The packaging machine is expected to be used for 13,000 working hours during its 10-year life. Assume a 31 December yearend.
Required: Assuming Burleigh Brews Pty Ltd uses the reducing balance method to account for depreciation, the reducing balance depreciation rate applied is 20% and that its financial year ends on 31 December, prepare journal entries to record:
a. the purchase of the packaging machinery on 1 September 2022, and
b. depreciation expense for year ended 31 December 2022.
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