Question 4 Noncurrent Assets (10 marks) Part a House at Pooh Corner Limited purchased a machine...

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Question 4 Noncurrent Assets (10 marks) Part a House at Pooh Corner Limited purchased a machine on 1 July 2013 at a cost of $60,000. On 30 June 2014, it was identified that this was incorrectly debited to machine expenses. The machine is expected to have a useful life of 5 years from the date of purchase and a residual value of $10,000. The machine is to be depreciated using the reducing balance method at a rate of 30%. Required: 1. Prepare the journal entry (or entries) necessary to correct the above error as at 30 June 2014. (4 marks) 2. Over the life of the machine, what will be the total depreciation charged on the asset (assume no changes in useful life, residual value and method of depreciation over the life of the asset)? (2 marks) Question 4 Noncurrent Assets (10 marks) Part a House at Pooh Corner Limited purchased a machine on 1 July 2013 at a cost of $60,000. On 30 June 2014, it was identified that this was incorrectly debited to machine expenses. The machine is expected to have a useful life of 5 years from the date of purchase and a residual value of $10,000. The machine is to be depreciated using the reducing balance method at a rate of 30%. Required: 1. Prepare the journal entry (or entries) necessary to correct the above error as at 30 June 2014. (4 marks) 2. Over the life of the machine, what will be the total depreciation charged on the asset (assume no changes in useful life, residual value and method of depreciation over the life of the asset)? (2 marks)

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House at Pooh Corner Limited Noncurrent Assets Part a 1 Journal Entry for Correction 4 marks ... View the full answer