The beginning balance in the Machinery control account and Accumulated Depreciation account, and dates in the accounts
Question:
The beginning balance in the Machinery control account and Accumulated Depreciation account, and dates in the accounts for various machinery acquisitions and disposals during the year by Liu Ltd are presented below.
Liu Ltd records depreciation to the nearest month.
At 1 January 2025, the company held only four items of machinery, and four exchange transactions took place during 2025 as indicated below.
Required
(a) Prepare in Liu Ltd’s accounting records the journal entries (in general journal format) to record the acquisition, disposal and depreciation charges for the period 1 January to 31 December 2025.
(b) Prepare the Accumulated Depreciation account for the period 1 January 2025 to 31 December 2025.
(c) Provide reasons, by referring to appropriate accounting standards, for an entity adopting the straight-line method for depreciating its machinery.
Step by Step Answer:
Accounting
ISBN: 9780730382737
11th Edition
Authors: John Hoggett, John Medlin, Keryn Chalmers, Claire Beattie