For the end of Robbie Ltd's financial year June 30^th 2019, the event below needs to be fixed. No adjusting entries have been prepared yet for the accounting period.  If a depreciable asset was purchased and it becomes available for use on the 16^th of that month or earlier, the business depreciates for all of the month. However, when it is available for use later than the 16^th, then depreciation will begin on the 1^stof the next month. The historical cost model is used for all Property, Plant and Equipment of Robbie Ltd. GST can be Ignored.

Robbie Ltd purchased machinery on the 11^th Sept. 2018, for $48,000 that had already been used by another business. The cost was posted with a debit to the Machinery account. Prior to its use, cash was used to pay for repairs to the used machinery which cost $4,200. In addition, installing the machinery cost $3,000. These events were posted with a debit to the Repairs and Maintenance Expense. The installation and machinery repairs were completed on 5^th Oct. 2018, after this, the machinery became available for use to the business for the first time since purchase. The useful life of 5 years begins from the date that it becomes available for business use. In addition, the residual value was given an estimate of $4,000. The declining balance depreciation method is used and is, calculated at 2 times the rate of the straight-line depreciation method.

prepare adjusting and correcting journal entries that are necessary.

Answer rating: 100% (QA)

Answer To prepare the adjusting and correcting journal entries for Robbie Ltds machinery purc... View the full answer