During 2016-2017, Winter Ltd. purchased three types of machines. Because of frequent employee turnover in the...
Fantastic news! We've Found the answer you've been seeking!
Question:
![During 2016-2017, Winter Ltd. purchased three types of machines. Because of frequent employee turnover in the accounting depa](https://dsd5zvtm8ll6.cloudfront.net/si.experts.images/questions/2021/05/60924198cd36a_1620197780170.jpg)
![June 30 July 3 End of financial year depreciation expenses recorded. Singed a contract with Easy Construction Ltd, for constr](https://dsd5zvtm8ll6.cloudfront.net/si.experts.images/questions/2021/05/6092419879635_1620197779929.jpg)
![Aug. 20 The construction of the new office complex was completed. The breakdown of the construction costs (all paid in cash)](https://dsd5zvtm8ll6.cloudfront.net/si.experts.images/questions/2021/05/60924198a3fe4_1620197780372.jpg)
![Apr. 20 June 30 July 28 estimated to be $1,200. The carrying amount of the parts replaced in the machine was considered to be](https://dsd5zvtm8ll6.cloudfront.net/si.experts.images/questions/2021/05/60924198c68fa_1620197780665.jpg)
![Instructions: You are required at least, to have a sheet in excel for . General journal entries Workings and calculations (in](https://dsd5zvtm8ll6.cloudfront.net/si.experts.images/questions/2021/05/60924196ddecb_1620197779608.jpg)
Transcribed Image Text:
During 2016-2017, Winter Ltd. purchased three types of machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods have been used. Information concerning the machines is summarised in the table below. Machine Date Initial Initial site Initial delivery Residual Useful Depreciation type acquired cost preparation and assembly value life Method costs costs Diminishing- 1 30/09/2016 $36,300 $1,200 $900 $9,000 8 balance Sum-of- 2 1/02/2017 $25,000 $1,000 $6,000 years'-digits 15/11/2017 $52,500 $700 $800 $10,500 10 Straight-line The end of financial year is at 30 June. The following transactions has taken place since the start of 2018; 2018 Feb. 24 Purchased land and a building worth $145,000, with the intention of tearing down the building and constructing a new office complex. An interest-free loan for $120,000 was taken from another company and the rest was paid in cash, plus an agent's commission of $8,800 and title search fees of $2,750. May 14 Paid Dan's Demolition Services $9,900 to demolish the building acquired on 24 September and received $750, from sale of materials salvaged from demolishing the old building. June 30 End of financial year depreciation expenses recorded. July 3 Singed a contract with Easy Construction Ltd, for construction of a new office complex on the land acquired on 24 February. It is expected to cost around $85,000. 1 Nov. 25 $1,700 cash for oil changes for machines. Insurance cost for the machines for the year was $2,000. 2019 Mar. 10 Purchased a used machine (number 4) for a recommended price of $48,200, but after careful negotiation it was purchased for $42,900 cash. The machine was treated for rust and was re-painted for $600 and installed for $1,200. The engine was reconditioned for $800 cash, as well as servicing the machine at a cost of $520. During installation, one of the major components was dropped and was repaired at a cash cost of $1,500. The machine is expected to make 50,000 units in total, with a residual value of $3,000. June 30 End of financial year depreciation expenses recorded. Machine number 4, due to delay in training new labour was not used Aug. 20 The construction of the new office complex was completed. The breakdown of the construction costs (all paid in cash) was as follows: • Payment to building contractor, $21,800 • building's structure materials, $56,300 • planning permit and building approvals, $5,400 excavation costs, $12,000 fees for the design and engineering of the complex, $3,830 The office complex is expected to have a residual value of $8,000 and a useful life of 15 years. The accountant has decided to use straight-line method to calculate the depreciation expenditure. Nov. 25 Paid $1,700 cash for oil changes for the machines. Insurance cost for the machines for the year was $2,000. 2020 Mar. 25 Machine 3 broke down. The management thought about replacing the machine with a new one, but after considering the cost of a new machine, it was decided to perform major repairs on this machine. A new engine was installed for a cost of $23,000, cash. The company expects these repairs to extend the machine's useful life by 2 years and the expected selling price by the end of useful life is estimated to be $1,200. The carrying amount of the parts replaced in the machine was considered to be equal to $12,000. Apr. 20 A parking area was paved, on the land purchased at a cost of $30,800. The parking area has a useful life of 8 years with $9,000 residual value. The depreciation method is diminishing balance method. June 30 End of financial year depreciation expenses recorded. Machine number 4 has produced 12,450 units. July 28 Due to high demand for the newly built office complex, management has decided to extend the office complex, by adding four new offices. The extension is to finish by early September 2020, at a cost of $25,600. As the extension will be fully financed through the Commonwealth Bank of Australia, the full cost of the extension is borrowed on this date from the bank and kept in an account called "cash trust", to be used for the project. The extension will increase the useful life of the building by 4 years. Aug. 11 Due to technological advances the company sold machine 2 for $10,000. Sep. 8 The extension work on the office complex was completed. Interest paid on the loan for extension was $2,800. Required Prepare the necessary general journal entries for all the above transactions, rounding to the nearest whole number for the amounts to be recorded. Depreciation calculations must be based on the dates provided (no rounding to the nearest month). Narrations are not required. Instructions: You are required at least, to have a sheet in excel for General journal entries Workings and calculations (including any relevant T accounts and depreciation rate calculation). Depreciation schedules for each depreciable asset (this could be on a separate sheet or part of the above sheet). During 2016-2017, Winter Ltd. purchased three types of machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods have been used. Information concerning the machines is summarised in the table below. Machine Date Initial Initial site Initial delivery Residual Useful Depreciation type acquired cost preparation and assembly value life Method costs costs Diminishing- 1 30/09/2016 $36,300 $1,200 $900 $9,000 8 balance Sum-of- 2 1/02/2017 $25,000 $1,000 $6,000 years'-digits 15/11/2017 $52,500 $700 $800 $10,500 10 Straight-line The end of financial year is at 30 June. The following transactions has taken place since the start of 2018; 2018 Feb. 24 Purchased land and a building worth $145,000, with the intention of tearing down the building and constructing a new office complex. An interest-free loan for $120,000 was taken from another company and the rest was paid in cash, plus an agent's commission of $8,800 and title search fees of $2,750. May 14 Paid Dan's Demolition Services $9,900 to demolish the building acquired on 24 September and received $750, from sale of materials salvaged from demolishing the old building. June 30 End of financial year depreciation expenses recorded. July 3 Singed a contract with Easy Construction Ltd, for construction of a new office complex on the land acquired on 24 February. It is expected to cost around $85,000. 1 Nov. 25 $1,700 cash for oil changes for machines. Insurance cost for the machines for the year was $2,000. 2019 Mar. 10 Purchased a used machine (number 4) for a recommended price of $48,200, but after careful negotiation it was purchased for $42,900 cash. The machine was treated for rust and was re-painted for $600 and installed for $1,200. The engine was reconditioned for $800 cash, as well as servicing the machine at a cost of $520. During installation, one of the major components was dropped and was repaired at a cash cost of $1,500. The machine is expected to make 50,000 units in total, with a residual value of $3,000. June 30 End of financial year depreciation expenses recorded. Machine number 4, due to delay in training new labour was not used Aug. 20 The construction of the new office complex was completed. The breakdown of the construction costs (all paid in cash) was as follows: • Payment to building contractor, $21,800 • building's structure materials, $56,300 • planning permit and building approvals, $5,400 excavation costs, $12,000 fees for the design and engineering of the complex, $3,830 The office complex is expected to have a residual value of $8,000 and a useful life of 15 years. The accountant has decided to use straight-line method to calculate the depreciation expenditure. Nov. 25 Paid $1,700 cash for oil changes for the machines. Insurance cost for the machines for the year was $2,000. 2020 Mar. 25 Machine 3 broke down. The management thought about replacing the machine with a new one, but after considering the cost of a new machine, it was decided to perform major repairs on this machine. A new engine was installed for a cost of $23,000, cash. The company expects these repairs to extend the machine's useful life by 2 years and the expected selling price by the end of useful life is estimated to be $1,200. The carrying amount of the parts replaced in the machine was considered to be equal to $12,000. Apr. 20 A parking area was paved, on the land purchased at a cost of $30,800. The parking area has a useful life of 8 years with $9,000 residual value. The depreciation method is diminishing balance method. June 30 End of financial year depreciation expenses recorded. Machine number 4 has produced 12,450 units. July 28 Due to high demand for the newly built office complex, management has decided to extend the office complex, by adding four new offices. The extension is to finish by early September 2020, at a cost of $25,600. As the extension will be fully financed through the Commonwealth Bank of Australia, the full cost of the extension is borrowed on this date from the bank and kept in an account called "cash trust", to be used for the project. The extension will increase the useful life of the building by 4 years. Aug. 11 Due to technological advances the company sold machine 2 for $10,000. Sep. 8 The extension work on the office complex was completed. Interest paid on the loan for extension was $2,800. Required Prepare the necessary general journal entries for all the above transactions, rounding to the nearest whole number for the amounts to be recorded. Depreciation calculations must be based on the dates provided (no rounding to the nearest month). Narrations are not required. Instructions: You are required at least, to have a sheet in excel for General journal entries Workings and calculations (including any relevant T accounts and depreciation rate calculation). Depreciation schedules for each depreciable asset (this could be on a separate sheet or part of the above sheet).
Expert Answer:
Answer rating: 100% (QA)
Feb24 Dollars Dollars 1 Land and Building AC Dr 145000 To Land and Building Vendor Cr 145000 2 Bank AC Dr 120000 Loan From a company Cr 120000 3 Land ... View the full answer
Related Book For
Financial Accounting Tools for business decision making
ISBN: 978-0470534779
6th Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
Posted Date:
Students also viewed these accounting questions
-
Use the following information for the Exercises below. [The following information applies to the questions displayed below.] Laker Company reported the following January purchases and sales data for...
-
In recent years, Avery Transporation purchased three used buses. Because of frequent turnover in the accounting department, a different accountant selected the depreciation method for each bus, and...
-
Due to rapid employee turnover in the accounting department, the following transactions involving intangible assets were improperly recorded by Neitzke Corporation in 2012. 1. Neitzke developed a new...
-
According to the Mortgage Bankers Association, 10% of all home mortgage loans in California were in foreclosure in the fourth quarter of 2011. Assuming this rate holds, if you randomly pick 30...
-
Look at the following electrostatic potential map of chloromethane, and tell the direction of polarization of the C ? C1 bonds: CI C-H Chloromethane H.
-
On January 1, 2014, Peregrine Corporation acquired 100 percent of the voting stock of Osprey Corporation in exchange for $2,017,000 in cash and securities. On the acquisition date, Osprey had the...
-
11. Matt just started work with Boom Zoom Inc., a manufacturer of credit-card-sized devices for storing and playing back music. Due to the popularity of its devices, analysts expect Boom Zooms stock...
-
Davis Consulting performs systems consulting. The company has also begun selling accounting software and uses the perpetual inventory system to account for software inventory. During January, Davis...
-
College Coasters is a San Diego - based merchandiser specializing in logo - adorned drink coasters. The company reported the following balances in its unadjusted trial balance at December 1 . The...
-
1. If you were to manage this project: (a) How would you have written up the project scope statement? Include the following elements in the scope statement: objectives, deliverables, and constraints....
-
System hazard analysis (SHA) is primarily performed during which two phases of the system life cycle? Group of answer choices Definition and development Concept and Production Production and...
-
Country Analysis of Milan: -Discuss the overall cultural, political, legal, economic, and technological infrastructure issues that could potentially impact a product's introduction in Milan. -You...
-
Sarah is a highly introverted employee who works in a fast-paced sales team. Her manager recently noticed that Sarah tends to be reserved during team meetings and rarely volunteers her ideas....
-
Community Disaster Preparedness Review the information found at https://www.ready.gov/community-preparedness-toolkit Look at the steps involved in formulating community response to a disaster....
-
The topic of diversity, tolerance, and inclusion has been widely (and, in many cases, hotly) debated in society over the past several years. In my opinion (and this is up for discussion - hence this...
-
The objective of this coursework is for you to critically engage with the theory and practice of promoting wellbeing or equality, diversity and inclusion (including cultural diversity) for employees...
-
Nakashima Gallery had the following petty cash transactions in February of the current year. Nakashima uses the perpetual system to account for merchandise Inventory. February 2 Wrote a $360 check to...
-
Time Solutions, Inc. is an employment services firm that places both temporary and permanent workers with a variety of clients. Temporary placements account for 70% of Time Solutions' revenue;...
-
Gayle Weir, a beginning accounting student, believes debit balances are favorable and credit balances are unfavorable. Is Gayle correct? Discuss.
-
Burden Inc. is considering these two alternatives to finance its construction of a new $2 million plant:(a) Issuance of 200,000 shares of common stock at the market price of $10 per share.(b)...
-
Delzer Corporation reported net sales $800,000; cost of goods sold $520,000; operating expenses $210,000; and net income $68,000. Calculate the following values and explain what they mean: (a) Profit...
-
If a forecasted purchase of equipment were to be denominated in foreign currency (FC), how would the change in value of a cash flow hedge of the forecasted transaction be accounted for? AppendixLO1
-
Construct a single lift chart which includes the better of the two CART models, the better of the two C4.5 models, and the neural network model. Which model is preferable over which regions?
-
Explain the floating international monetary system, and identify factors that influence rates of exchange between currencies. AppendixLO1
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App