Richard and Rachel operate a coffee shop, Richell Coffee Roaster Pty Ltd, with a financial year ending 30 June. On 1 July 2017, they purchased a new espresso machine for $23,000 (ignore GST). They then paid a further $500 (ignore GST) for delivery of the machine and $900 (ignore GST) to have it installed. All amounts were paid in cash. The company estimates that the machine has a 4 years useful life, and a residual value of $4,400 (ignore GST). They intend to depreciate the machine using the straight-line method.

On 30 June 2020, the company sold the espresso machine for $10,000 cash (ignore GST).

REQUIRED:

1. Calculate the cost of the espresso machine.
2. Prepare a depreciation worksheet covering the entire useful life of the machine.
3. Show the required journal entries to record:

1. 1. the acquisition of the machine (combine as 1 entry)
2. 2. the annual depreciation charge (note: only 1 entry required, as the journal entry will be the same each year, only with different dates)
3. 3. the disposal of the machine on 30 June 2020.

Narrations are not required.