Question 2.2 Non-current assets (7 marks)

The company purchased a machine on 1 January 2018. The information of the machine is as follows:

Costs on Acquisition on 1 January 2018:
Machine Cost (paid in cash by purchaser) Import Tax (paid in cash by purchaser) Delivery Fees (paid in cash by purchaser)	$25,000 $2,000 $3,000
Depreciation Method:	Reducing balance method at the rate of 40%
Residual value:	$4,000
Useful Life:	5 Years

1. Prepare the journal entry for the purchase of the machine. (1 Marks)

2. Calculate the depreciation expense for the year 2019. (2 Marks)

3. On 1 January 2020, the machine was sold for $12,000. Prepare the journal entry for this sale. (4 Marks)