A machine was purchased on 1 April 20X0 for $120,000. It was estimated that the asset...

 

Transcribed Image Text:

A machine was purchased on 1 April 20X0 for $120,000. It was estimated that the asset had a residual value of $20,000 and a useful life of 10 years at this date. On 1 April 20X2, the residual value was reassessed as being only $15,000 and the remaining useful life was considered to be only five years. Required Demonstrate how the machine should be accounted for in the years ended 31 March 20X1, 20X2 and 20X3 and prepare extracts of the statement of profit or loss and statement of financial position for each year. A machine was purchased on 1 April 20X0 for $120,000. It was estimated that the asset had a residual value of $20,000 and a useful life of 10 years at this date. On 1 April 20X2, the residual value was reassessed as being only $15,000 and the remaining useful life was considered to be only five years. Required Demonstrate how the machine should be accounted for in the years ended 31 March 20X1, 20X2 and 20X3 and prepare extracts of the statement of profit or loss and statement of financial position for each year.

Answer rating: 100% (QA)

As a result of the change in expected useful life and residual value the depreciation charge in the ... View the full answer