Baron Limited (Baron) incurred the following during the month of July 2019: $360,000 for the purchase...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Baron Limited (Baron) incurred the following during the month of July 2019: $360,000 for the purchase a new machine. The new machine was purchased due to the increased demand of Baron's sole product. $54,000 for installation and assembly cost. $1,000 for insurance. The insurance was taken out once the machine was ready for use and covered the period up to the end of the financial year i.e. 30 June 2020. All amounts were paid in cash. The machine was estimated to have a useful life of 5 years and a residual value of $12,000. The straight-line depreciation method is used. Baron uses the revaluation model for its machinery. Based on the company policy, the machine was revalued to $350,000 on 30 June 2020. At this time, the remaining useful life is assessed to be 4 years with a residual value of $14,000. On 30 June 2021 there was indication that the machine had been impaired due to the drastic reduction in the selling price of Baron's sole product. Due to this, an impairment review was caried out. It was determined that the fair value of the machine on 30 June 2021 was $200,000, the cost to sell the machine was $5,400 and the value in use was $195,000. After the recognition of impairment on 30 June 2021, the remaining useful life of the machine was determined to be 3 years and the residual value was estimated as $8,000. On 30 June 2022, the machine was sold for $110,000. Required: Part A Show all journal entries, in relation to the machine, for the years ended 30 June 2020, 30 June 2021 and 30 June 2022. Baron Limited (Baron) incurred the following during the month of July 2019: $360,000 for the purchase a new machine. The new machine was purchased due to the increased demand of Baron's sole product. $54,000 for installation and assembly cost. $1,000 for insurance. The insurance was taken out once the machine was ready for use and covered the period up to the end of the financial year i.e. 30 June 2020. All amounts were paid in cash. The machine was estimated to have a useful life of 5 years and a residual value of $12,000. The straight-line depreciation method is used. Baron uses the revaluation model for its machinery. Based on the company policy, the machine was revalued to $350,000 on 30 June 2020. At this time, the remaining useful life is assessed to be 4 years with a residual value of $14,000. On 30 June 2021 there was indication that the machine had been impaired due to the drastic reduction in the selling price of Baron's sole product. Due to this, an impairment review was caried out. It was determined that the fair value of the machine on 30 June 2021 was $200,000, the cost to sell the machine was $5,400 and the value in use was $195,000. After the recognition of impairment on 30 June 2021, the remaining useful life of the machine was determined to be 3 years and the residual value was estimated as $8,000. On 30 June 2022, the machine was sold for $110,000. Required: Part A Show all journal entries, in relation to the machine, for the years ended 30 June 2020, 30 June 2021 and 30 June 2022.
Expert Answer:
Answer rating: 100% (QA)
Lets prepare the journal entries for the machine for the years ended 30 June 2020 30 June 2021 and 3... View the full answer
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Posted Date:
Students also viewed these accounting questions
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
Ignore taxation. CottonOff Ltd (CO) is a well-established retail company with a focus on providing fashion clothing and stationery brands. CO is known for putting their own twist on current trends to...
-
1. How strong are the competitive forces confronting J. Crew in the market for specialty retail? Do a [Michael Porter] five-forces analysis to support your answer. (see chapter 3 in the textfor...
-
Lauren Smith was relaxing after work with a colleague at a local bar. After a few drinks, she began expressing her feelings about her company's new control initiatives. It seems that as a result of...
-
How do you explain the use of countertrade? Under what scenarios might its use increase still further by the year 2020? Under what scenarios might its use decline?
-
Customers arrive to check in at the exclusive and expensive Regency Hotels lobby at a rate of 40 per hour (Poisson distributed). The hotel normally has three clerks available at the desk to check in...
-
What role does critical thinking play in strategic planning?
-
The following section is taken from Paynter balance sheet at December 31, 2011. Current liabilities Interest payable ...............$ 40,000 Long-term liabilities Bonds payable (8%, due January 1,...
-
Soit la limite lim (cos(3x) ) 1/x2 a) Quelle est la forme indeterminee de la limite? 0 0 0 100 100 0/0 0 00/ 00 0 00 b) Calculer la limite en utilisant la regle de l'Hospital de maniere appropriee,...
-
The manager of a trendy downtown caf in Columbus, Ohio, collects weekly data on the number of customers it serves. A portion of the data is shown in the accompanying table. a. Use the simple...
-
Henriettas Pine Bakery Background You are an analyst for the professional service firm, FINACC LLP. Your firm specializes in providing a wide variety of international business solutions for different...
-
Solve with Moore and Hodgson's Algorithm: Consider the following five jobs. Job () Processing Time (p;) 1 2 3 4 5 4 6 6 8 Due Date (d) 18 19 9 21 17 Find the schedule that minimizes the number of...
-
How do interest rates affect the value of debentures? 12. What factors should investors consider when analyzing the risk and return of debentures? 13. How are debentures different from bonds and...
-
Consider that consumer price acceptance is not driven by value as is assumed in value-based pricing. This would imply that people only pay for the product features. In fact, people pay for much more...
-
Briefly explain why CAPM includes only the systematic risk (beta risk) while ignoring the unsystematic risk.
-
Coles Group has $50 million capital, which includes $15 million debt. Shareholders' required rate of return is 7% p.a. Cost of debt is 5%. Calculate Coles Group's Weighted Average Cost of Capital....
-
A triangular parcel of ground has sides of length 750 feet, 635 feet, and 585 feet. Find the measure of the largest angle. (Round your answer to one decimal place.)
-
At the beginning of the year, Lam Ltd. had total assets of $800,000 and total liabilities of $500,000. Use this information to answer each of the following independent questions. (a) If Lam's total...
-
Ormond Co. acquired all of the outstanding common stock of Daytona Co. on January 1, 2017. Ormond Co. gave shares of its common stock with a fair value of $312 million in exchange for 100% of the...
-
Lowe's Companies, a retailer of home improvement products, reported cost of goods sold of $31,729 million for Year 1. It reported merchandise inventories of $7,611 million at the beginning of Year 1...
-
Excerpts from the disclosures on derivatives in a recent year (denoted Year 4) by The Coca-Cola Company (Coke) appear below. Our Company uses derivative financial instruments primarily to reduce our...
-
A 40 in plasma television uses about \(175 \mathrm{~W}\). How many kilowatt-hours are needed to run the television in a month if the television is on for an average of 3 hours a day?
-
Which of the following is true regarding the accounting cycle? a. The accounts are adjusted after preparing the financial statements. b. Journal entries are made prior to the transaction being...
-
How many pills would be needed for a patient who has been prescribed \(25.5 \mathrm{mg}\) of a drug if each pill contains \(4.25 \mathrm{mg}\).
Study smarter with the SolutionInn App