Your client is one of Australias major steel and metal fabricators. To increase production and, therefore sales, it decided to acquire a new fabrication plant. The purchase was completed on the 1^st May 20X3. The following are a range of costs (in no particular order) which have been incurred in relation to the acquisition of the new fabrication plant:

The new fabrication plant required an increase to existing security systems. This is the cost of that increase.	$185,000
An internal project team was established to look at the various new fabrication plant options. This is the amount of the costed time of the staff involved.	$23,770
The new fabrication plant has inbuilt complex software which allows it to operate at maximum and efficient levels. This software system needs to interface with existing software and computer systems in the company. As a result the existing software needed a major upgrade and this is the cost of that upgrade.	$87,500
The new fabrication plant requires expert installation and commissioning. This is the cost of that process.	$124,500
The new fabrication plant significantly increases production and it follows that sales must increase. This is the cost of a contract for a major marketing campaign, TV and online, for the next 12 months.	$54,000
A new facility was built where the new fabrication plant will be located. This is the cost of that facility.	$1,450,000
Purchase cost of the base (ie un-optioned) new fabrication plant.	$2,350,000
Additional staff were employed to operate the new fabrication plant. These are the costs incurred in training the new staff.	$22,400
Additional options were also purchased. These options attach to the new fabrication plant and allow it to manage a wider range of metals. This is the cost of the options.	$543,700
The new fabrication plant is manufactured in Poland and import taxes are required to be paid. This is the amount of the import taxes.	$254,200
The company took advantage of a 6 month maintenance contract for the new fabrication plant and this is its cost.	$18,500
The new fabrication plant was acquired under special Government provisions and is exempt from GST of 10%.	-
The new fabrication plant will significantly increase production. New contracts for the supply of raw materials (eg steel and metals) were required to be signed. This is the cost of the lawyers to negotiate and manage those contracts.	$9,500

All the above costs were paid from cash in the bank and for convenience assume they were made on the same day of completion.

Required

Complete the following general journal that recognises only the acquisition of the new fabrication plant. Narration is not required. Please circle which part of costs belong to the acquision of the new fabrication plant cost in the listing

Date		DR	CR

Part B

On 31^st October 20X2 the Big Prawn Fishing Co Ltd purchased a Prawn Trawler which gave rise to the following general journal entry (narration deleted).

Date		DR	CR
20X2	Prawn Trawler	1,880,000
Oct 31	Cash at Bank		180,000
	Loan Payable		1,700,000

Additional information:

• Useful life of the Prawn Trawler is 15 years or 66,000 nautical hours. The Reducing Balance depreciation rate = 16.8%pa. and the straight line rate is 6.7%pa.
• Residual value is $98,000

The estimated nautical hours usage in the first five financial years are:

Financial Year ending 30th June	Number of estimated nautical hours
20X3	2,900
20X4	4,500
20X5	4,800
20X6	4,900
20X7	4,950

Complete the depreciation schedules below for the Prawn Trawler for the units of production and reducing balance methods for the year ended 30^th June 20X3. Round numbers to the nearest dollar. 4 marks

Units of Production

Year ended	Opening Balance	Depreciation expense	Accumulated Depreciation	Closing Balance

Reducing Balance

Year ended	Opening Balance	Depreciation expense	Accumulated Depreciation	Closing Balance