A company has the following balances brought forward for its equipment:

Cost RM655,800

Accumulated depreciation RM132,128

In the second quarter of the year, the company acquired a new equipment with a purchase

price of RM95,400 and incurred an installation fee of RM5,000.

During the year, the company had an existing equipment with a cost of RM156,000 and

accumulated depreciation of RM85,800. The equipment was exchanged for new one costing

RM215.500. The trade-in price of the existing equipment was RM65,000.

The company’s policy is to depreciate assets at 15% using straight-line method. Depreciation

is to be provided full in the year of purchase and none in the year of disposal.

Required:

Show the relevant ledger entries to account for the above.

Answer rating: 100% (QA)

The following are the required answers 1 The cost of the equipment at the end of the year is RM72327... View the full answer