The gain or loss on sale of Machine 1 is?

2. The loss on trade in of Machine 3 is?

3. The Production Machine account is overstated by?

4. The total depreciation for the year ended December 31, 2020 is?

5. The carrying amount of production machine as of December 31, 2020 is?

 

In the audit of the Books of Big Hit Corporation for the year 2020, the following items and information appeared in the Production Machine account of the client: Date 01/01 02/28 09/01 12/01 1. 2. Particulars Balance- Machine 1,2,3 and 4 at 180,000 each Machine 1 Machine 2 Machine 3 Machine 4 Machine 5 Machine 1 Machine 6 Machine 7 Debit P 720,000 P 168,750 78,750 67,500 45,000 396,000 192,000 432,000 The accumulated depreciation account contained no entries for the year 2020. The balance on January 1, 2020 per your audit, was follows: Credit P 6,000 Based on your further inquiry and verification, you noted the following: Machine 5 was purchased for cash; it replaced Machine 1, which was sold on this date for 6,000. Machine 2 was destroyed by the thickness of engine oil used leading to explosion on December 1, 2020. Machine 7 was to replace Machine 2. 3. Machine 3 was traded in for Machine 6 at an allowance of 24,000; the difference was paid in cash and charged to Production Machine account. 4. Depreciation rate is recognized at 25% per annum.