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Question - Nature Pty Ltd's machinery control accounts shows carrying amount for the following machine as at 1 July 2019: Machine A (cost $250,000) $200,000 Machine B (cost $340,000) $320,000 Machine A was acquired on 1 July 2017 with estimated useful life of 10 years and no residual value. Machine B was acquired on 1 January 2019 with estimated useful life of 8 years and residual value of $20,000. All machinery is depreciated on a straight-line basis.
Required -
1. Calculate the depreciation charge for Machine A and B for the year ending 30 June 2020. Show all workings.
2. On 1 July 2020, Nature Pty Ltd traded in Machine B and paid cash $40,000 to exchange for Machine C, which costs $300,000. Calculate the resultant gain or loss on the transfer of Machine B. Show all workings.
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