Khan Ltd entered into the following transactions during the year ended 31 December 2025. Ignore GST. Required
Question:
Khan Ltd entered into the following transactions during the year ended 31 December 2025. Ignore GST.
Required
(a) Prepare entries in general journal form to record the above transactions.
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Jan. 4 Sold for $17 600 a machine that had cost $35 000 on 2 January 2022. The machine's useful life and residual value were 5 years and $5000 respectively. Accumulated depreciation on the machine to 31 December 2024 was $18 000. Mar. 30 Scrapped a machine that cost $32 000 and had accumulated depreciation of $28 000. Disposal costs of $500 were incurred. April 1 Exchanged a block of land that had cost $200 000 for machinery. The fair value of the land given up was $220 000. July 1 Exchanged a machine with a cost of $92 000 and accumulated depreciation to the date of exchange of $62 000 for a new similar machine. A trade-in allowance of $25 000 was received for the old machine and $60 000 was paid in cash. Sept. 1 Sold for $45 000 cash a machine that cost $105 000 on 31 August 2020. The machine had a useful life of 6 years and a residual value of $9000 when purchased. On 31 December 2024, straight-line depreciation of $16 000 p. a. was recorded. No depreciation has yet been recorded for 2025. Oct. 31 Exchanged a building with a cost of $275 000 and accumulated depreciation to the date of exchange of $195 000 for a machine. The fair value of the building at this date was $90 000. Dec. 31 Recorded amortisation of the company's natural gas reserve. The reserve was purchased on 1 January 2025 for $90 000 000. On the date of purchase, the reserve was estimated to contain 40 000 000 units of natural gas and to have a residual value of $10 000 000. One million units of gas were extracted and sold during 2025.
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Accounting
ISBN: 9780730382737
11th Edition
Authors: John Hoggett, John Medlin, Keryn Chalmers, Claire Beattie
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