MedPharm Limited is a manufacturer of medicinal vaccines. MedPharm has manufacturing assembly lines in Germany and South
Fantastic news! We've Found the answer you've been seeking!
Question:
MedPharm Limited is a manufacturer of medicinal vaccines. MedPharm has manufacturing
assembly lines in Germany and South Africa. In an effort to help curb the spread of the coronovirus,
they have undertaken to manufacture the approved COVID vaccines at their plant in South Africa.
They recently purchased a top of the range, more efficient and productive machine specifically for
this purpose of manufacturing the COVID vaccines. Details of the purchase are below:
The machine was purchased on the January for R
The machine was expected to have a useful life of years
On date of acquisition, the machine was expected to have a residual of R
Machinery is depreciated on a straight line basis
On the January the estimated residual was decreased to R
The company uses the reallocation method to record changes in accounting estimates.
Required
Disclose the change in estimate and profit before tax notes for the year ended
December
Provide the journal entries if depreciation based on the old estimate had already been
processed for the current year.
Related Book For
Auditing a business risk appraoch
ISBN: 978-0324375589
6th Edition
Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston
Posted Date: