Depreciation Combat Covid-19 Ltd was established to produce disposal protective masks and face shields which are...

Depreciation
Combat Covid-19 Ltd was established to produce disposal protective masks and face shields
which are in high demand. The company bought an Ultrasonic Machine at a purchase price of
GH₵50,000; transportation charges GH₵3,000; Purchase commission GH₵1,000; and
Installation and testing GH₵3,600.
The Ultrasonic Machine produces 80 pieces per minute. It works 24 hour per day for five-day
week and uses 2 days for maintenance and repairs. The machine will be used for 20 weeks after
which it will be sold at a salvage value of GH₵7,600. The 20 weeks should recover the machine
cost.
You are required to:
a. determine the machine cost
b. calculate the depreciation expense using straight line method
c. calculate the unit cost of depreciation
d. prepare weekly schedule of depreciation for the straight line and unit-of-production
methods for 5 weeks separately (e.g. week, cost, depreciation expense, accumulated
depreciation, and Net Book value; consider the weeks as periods). Ignore salvage value
when calculating unit-of-production.
e. journalize the depreciation expense and accumulated depreciation of the straight line
method.
f. post the journal entries into their respective accounts

Solutions

Expert Solution

ekkarill92 answered 1 year ago

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