User Account

All Pages

Calculate the depreciation expense for the year ending

Assignment Help Accounting Basics
Reference no: EM133090724

Question - On 15 January 2020, Shibu Ltd purchased second-hand equipment for $94,270 (GST Inclusive) in cash to manufacture a new product for sale overseas. On the same day Shibu Ltd installed the equipment and paid an installation cost of $2,310 (GST Inclusive). The estimated useful life of the equipment is 6 years, with a residual value of $5,100. According to the technical consultant, the equipment is expected to have a running life of 250,000 hours.

To maintain the same level of economic benefits from the equipment, Shibu Ltd pays $2,200 (GST Inclusive) each year for maintenance costs. (GST RATE = 10%)

Required -

1. Prepare the required journal entries for:

-The initial purchase on 15 January 2020 (include the calculation for initial cost of the equipment),

-The annual maintenance cost of $2,200

2. Calculate the depreciation expense for the year ending 30 June 2022, using the following methods:

-Diminishing balance method

-Units of production, assuming the equipment was used for 57,500 hours for the year ending 30 June 2022.

Reference no: EM133090724

Questions Cloud

What benefits your solution will produce : Choose a problem that is impacting the world. e.g. poverty, climate, healthcare, etc. Imagine you have built a system that can help tackle that problem.
What is taxable income and tax liability in each scenario : Scenario 1: Lee borrowed the money from Ronald's Taj McHal in Las Vegas. What is taxable income and tax liability in each scenario
What is the ROI for each year of the asset life : What is the ROI for each year of the asset's life if the division uses beginning-of-year asset balances and net book value for the computation
Calculate the value of Arnold and Edward initial capital : Interest on advance to be 7% per annum. Calculate the value of Arnold and Edward's initial capital when the partnership was formed on 1 July 2020
Calculate the depreciation expense for the year ending : Calculate the depreciation expense for the year ending 30 June 2022, using the following methods: Diminishing balance method
Prepare a detailed income statement for the year ended : Office salaries of $2,800 are unpaid and not recorded at 30 June 2021. Prepare a detailed income statement for the year ended 30 June 2021
Developing an international competitive strategy : When developing an international competitive strategy, A VRIO analysis of an organization's resources can be conducted to assess the strength of the company's s
Explain how that can happen as it relates to short-term : What new start-up company (in business 1-2 years) that went bankrupt because they grew too fast. Explain how that can happen as it relates to short-term cash ma
Making use of web analytics : When it comes to online data, most organizations should be making use of web analytics. What sort of information is available using this source?

Reviews

Write a Review

Accounting Basics Questions & Answers

  What is Rejoice additional tax

Rejoice held undistributed income of $160,000 at the end of its 2017 tax year. What is Rejoice's additional tax for 2020

  Prepare journal entries to record credit card transactions

Levine Company uses the perpetual inventory system. Prepare journal entries to record the above credit card transactions of Levine Company

  Record budget in the general journal for street improvement

On January 2, 2021, Record the budget for FY 2021 in the general journals for the Street Improvement Bond Debt Service Fund.

  Find how long will take to repay the loan for mary corens

If Mary repays $1,800 per year, then how long (to the nearest year) will it take her to repay the loan? Do not round intermediate calculations.

  Problem - Retained Earnings Statement

Problem - Retained Earnings Statement - Mavis Curry owns and operates A2Z Delivery Services. On January 1, 2011, Retained Earnings had a balance of $600,000

  Make the first interest payment and the amortization

On the first day of the fiscal year, a company issues a $1,400,000, 7%, Make the first interest payment and the amortization of the related bond discount

  Marginal tax rate and an average tax rate

What is the difference between a marginal tax rate and an average tax rate? Which is more important in determining the effect of a change in taxes on economic behavior?

  Denton company has a large portion of its plant assets

denton company has a large portion of its plant assets concentrated in an area where technology is changing rapidly.

  Prepare a segmented income statement

Prepare a segmented income statement in the contribution format for the company. Omit percentages; show only dollar amounts.

  What is your dollar return

You can buy call options on that same stock for $1.25 with a strike price of $55. What is your dollar return if you invest $5,000 in the stock

  Find cost per equivalent unit for direct materials

Pullian Company makes a variety of chemicals. Its Mixing Department reports the following information for the May of the current year - Compute the cost per equivalent unit for direct materials and conversion.

  Recorded the adjusting entry for accrued interest

Prepare the current and long-term liability sections of the December 31, 2011, balance sheet. Trade accounts payable on that date were $252,000.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd