On 1 January 2017, Peachy Ltd bought a machine for $142 000 cash. The useful life...

On 1 January 2017, Peachy Ltd bought a machine for $142 000 cash. The useful life of the machine was 10 years and the residual value was $17 000. The machine was to be depreciated using the straight line method. On 30 September 2019, the machine was traded in for a new model which cost $220 000. Peachy Ltd received a trade in allowance of $90 000 for the old machine. The new machine had a residual value of $25 000 and is to be depreciated using the diminishing balance method at a rate of 15%.

Prepare General Journal entries to record all the transactions for the above events up to 30 June 2020. Post the journal into the ledger. NOTE: you have to show the recording of the depreciation expense at the end of EACH financial year. Peachy Ltd uses the 30th June as the end of its financial year. You may find it helpful to draw a timeline showing each financial year to make sure you have all the required entries. Assume when the machine was traded-in on 30 September 2019 that the additional amount payable on top of the trade-in allowance was paid with cash.

Expert Solution

ekkarill92 answered 1 year ago

•On 1 January 2012, Carrier plc bought a machine for £36,600. The machine’s useful life was...

•On 1 January 2012, Carrier plc bought a machine for £36,600. The machine’s useful life was estimated to be three years, with a residual value of £600. Depreciation was provided on a straight-line basis. At 1 February 2013, the machine was sold for £23,000. •The company replaced the machine on 28 February 2013 with a more modern version, one which cost £50,000. Carrier plc decided to depreciate the new machine on a reducing balance basis, using a rate of 70%...

MTM Ltd acquired a machine with an original cost of R900 000 on 1 January 2017....

MTM Ltd acquired a machine with an original cost of R900 000 on 1 January 2017. The machine has a five-year life and an estimated salvage value of 100 000. a) Compute depreciation for 2017 and 2018 under each of the following methods: i. Sum-of-years’ digits ii. Double declining balance iii. Straight line b) Compare the impact of the straight line and double-declining balance method on each of the following: i. Trend of depreciation over a five year life ii....

Waterway's Copy Shop bought equipment for $457800 on January 1, 2017. Waterway estimated the useful life...

Waterway's Copy Shop bought equipment for $457800 on January 1, 2017. Waterway estimated the useful life to be 3 years with no salvage value, and the straight-line method of depreciation will be used. On January 1, 2018, Waterway decides that the business will use the equipment for a total of 5 years. What is the revised depreciation expense for 2018?

On January 1, 2017, company purchased a molding machine at 67.000 TL. The estimated useful life...

On January 1, 2017, company purchased a molding machine at 67.000 TL. The estimated useful life of the machine is 4 years and the estimated salvage value is 2.000 TL. At the beginning of the 3rd year a major renovation is maintained on the machine. The cost of the renovation is 34.000 TL. Because of the renovation estimated useful life extended to 6 years in total and the salvage value increased to 2.500 TL. Assume the company uses double declining method prepare...

Torge Company bought a machine for $62,000 cash. The estimated useful life was five years and...

Torge Company bought a machine for $62,000 cash. The estimated useful life was five years and the estimated residual value was $8,000. Assume that the estimated useful life in productive units is 174,000. Units actually produced were 46,400 in year 1 and 52,200 in year 2. Required: 1. Determine the appropriate amounts to complete the following schedule. (Do not round intermediate calculations.) 2-a. Which method would result in the lowest net income for year 1? A.Units-of-production B.Straight-line C.Double-declining-balance 2-b. Which...

A company bought a machine on January 1, 2017 for use in operations. The machine cost...

A company bought a machine on January 1, 2017 for use in operations. The machine cost $35,000 and the estimated residual value was $3,000. The machine has useful life of 3 years and produced 15,000 during 2017, 20,000 units during 2018 and 25,000 during 2019. Compute the depreciation expense under the straight line method for 2017, 2018 and 2019. Compute the depreciation under the units of production method for 2017, 2018 and 2019. Compute the depreciation under the double declining...

A machine was purchased on January 1 for $100,000. The machine has an estimated useful life...

A machine was purchased on January 1 for $100,000. The machine has an estimated useful life of 4 years with a salvage value of $10,000. Under the straight-line method, accumulated depreciation at the end of year 2 is:

Lomani Ltd acquired two new machines for cash on 1 January 2017. The cost of machine...

Lomani Ltd acquired two new machines for cash on 1 January 2017. The cost of machine A was $400 000, plus GST, and of machine B, $600 000, plus GST. Each machine was expected to have a useful life of 10 years, and residual values were estimated at $20 000 for machine A and $50 000 for machine B. Because of technological advances, Lomani Ltd decided to replace machine A. It traded in machine A on 31 March 2021 for...

Benson Company bought a machine costing $120,000 on 1 April 2015. Management estimated the useful life...

Benson Company bought a machine costing $120,000 on 1 April 2015. Management estimated the useful life to be 10 years and the residual value to be $20,000. On 1 January 2018, management revised the useful life and residual value of the machine. The remaining useful life was revised to 5 years while the residual value was revised to $10,000. The company’s financial year end is 31 December. Compute the depreciation expense, accumulated depreciation and net book value of the machine...

Part a JKL Ltd bought an item of equipment at $4 million on 1 January 2017,...

Part a JKL Ltd bought an item of equipment at $4 million on 1 January 2017, it had estimated life of 8 years and residual value at $800,000. The equipment was depreciated on straight line basis. However, the Inland Revenue Department does not allow depreciation as deductible expenses. Instead, tax expenses of this type of asset can be claimed against income tax in the year of purchase and 20% per annum (on reducing balance basis) of tax base thereafter. The...

Question