Question1

On 09/01/X1, the company Purinos Garca, S.A., acquires a machine for 425,000. The machine carries a discount of 50,000. Half is paid in cash and the other half on 11/30/X2.

The useful life of the machine is 10 years, the residual value of 1,800 and the linear amortization. Transport costs are 800 and installation costs 1,100, which are paid in cash. In addition, it is estimated that dismantling costs at the end of the useful life will amount to 6,700 -with a discount rate of 1.5%.

At the end of the X1 financial year, the fair value of the machine is 350,000, the cost of sale is 8,000 and the value in use is 342,586.

Finally, the machine is sold at the end of December of the X2 for a value of 108,000 in cash.

It is also known that VAT is 21%.

It is requested to record the following operations:

Acquisition of the asset.

Amortization at the end of X1.

Deterioration at the end of X1 if applicable.

Reclassification of the pending payment of the machinery.

Payment of the pending amount.

Sale of the machine and its accounting impacts.