Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

right answer please Crescent Limited acquired a machine on Sept 1, 2018 for $39,500. Installation costs for the machine was $1,200. On Sept 1, 2019,

image text in transcribed

image text in transcribed

right answer please

Crescent Limited acquired a machine on Sept 1, 2018 for $39,500. Installation costs for the machine was $1,200. On Sept 1, 2019, in order to reduce operating costs, a custom extension was added to the machine resulting in an expenditure to the company of $5,200. The original residual value was $1,700. Due to the extension, the residual value has been changed to $2,145. Also, total estimated useful life has been changed from total life of 8 years to total life of 10 years. On July 1, 2020, Crescent Limited purchased a new machine with a market value of $40,000. As part of this acquisition, the company traded in its old machine (which had a fair value of $32,250) and paid $8,700 in cash. Assume a December 31 year end. The company uses IFRS. Required: Answer the next three questions using the above information. Round all answers to the Dollar. 1. What is the new Depreciation Expense per year calculated on Sept 1, 2019 due to the changes and the new custom extension? (2 marks) $ 2. What is depreciation expense for the old machine for year ended December 31, 2018, for year ended December 31, 2019 and for 2020 up to July 1, 2020? (3 marks) At December 31, 2018: $ At December 31, 2019: $ From Jan 1, 2020 to July 1, 2020: $ 3. Record the journal entry to record the eychanie custom extension? (2 marks) $ 2. What is depreciation expense for the old machine for year ended December 31, 2018, for year ended December 31, 2019 and for 2020 up to July 1, 2020? (3 marks) At December 31, 2018: $ At December 31, 2019: $ From Jan 1, 2020 to July 1, 2020: $ 3. Record the journal entry to record the exchange of assets transaction on July 1, 2020 (Assume there is commercial substance) (5 marks) New Machine $ Accumulated Deprecation, Old Machine $ Loss $ $ Old Machine $ Cash

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions

Question

Help Save & Exit Submit Multiple Choice $ 3 $ 6 $ 9 $ 1 0 $ 1 3

Answered: 1 week ago