On 1st January 20X1, WWW Limited (WWW) purchased new machinery for $210 560. WWW paid some directly attributable cost to bring this machinery into working condition. In particular, WWW paid the freight cost of $3 580 and the installation cost of $4 843. This machine is expected to have a useful life of ten years with a residual value of $2 106. The pattern of economic benefits from using this machinery is constant. Therefore, it is decided that the straight-line depreciation method will be used. Ignore GST.

 

Required:

a. Determine the cost of the machine

b. Assuming that year ends on 30 June, record the journal entry of depreciation expenses on 30 June 20X3

c. Calculate the accumulated depreciation balance at the end of the fourth year.

Answer rating: 100% (QA)

a To determine the cost of the machine we need to consider the initial purchase cost and the directl... View the full answer