On 1 July 2015, Chadstone Ltd purchased a motor vehicle which is estimated to have a $6000
Question:
On 1 July 2015, Chadstone Ltd purchased a motor vehicle which is estimated to have a $6000 residual value and a useful life of 4 years. On 1 July 2017, the company purchased plant and equipment which is estimated to have a residual value of $10 000 and a useful life of 4 years. The following is an extract from the balance sheet showing the carrying amounts of these assets at 30 June 2018:
Chadstone LTD Balance sheet (extract) as at 30 June 2018 | ||||||||
NON-CURRENT ASSETS Property, plant and equipment: Plant and equipment (at cost) Less: Accumulated depreciation | $ | 90 000 20 000 | $ | 70 000 | ||||
Motor vehicle (at cost) Less: Accumulated depreciation | 30 000 18 000 | 12 000 | ||||||
$ | 82 000 | |||||||
Required
A. For each asset, calculate the percentage of useful life expired.
B. What decisions will management need to make in the next financial year?
C. Prepare the journal entries to record depreciation expense at 30 June 2019.
D. Prepare an extract from the balance sheet at 30 June 2019 (assuming no new assets have been purchased).
Balance SheetBalance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett