On 1 January 20X8, Mpho, an entity, acquires a machine for BWP20, 000 with an anticipated...

 

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On 1 January 20X8, Mpho, an entity, acquires a machine for BWP20, 000 with an anticipated useful life of 10 years and no residual value. The entity employs the straight-line depreciation method. By 31 December 20X9, the entity opts to divest the machine. Its present market value stands at BWP15, 000, and the entity is assured of a swift sale due to the scarcity of this machinery type in the market. There will be an associated cost of BWP500 for dismantling the machine. a) Illustrate At what value should the machine be included in Mpho's statement of financial position (6 marks) AND what entries should be made to the statement of Profit and Loss (4 marks) for 31 December 20X9? On 1 January 20X8, Mpho, an entity, acquires a machine for BWP20, 000 with an anticipated useful life of 10 years and no residual value. The entity employs the straight-line depreciation method. By 31 December 20X9, the entity opts to divest the machine. Its present market value stands at BWP15, 000, and the entity is assured of a swift sale due to the scarcity of this machinery type in the market. There will be an associated cost of BWP500 for dismantling the machine. a) Illustrate At what value should the machine be included in Mpho's statement of financial position (6 marks) AND what entries should be made to the statement of Profit and Loss (4 marks) for 31 December 20X9?

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a Statement of Financial Position At 31 December 20X9 the machine should be included in Mphos statem... View the full answer