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How provide the journal entries that richmond pty ltd use

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Reference no: EM132707827

Richmond Pty Ltd constructed a Giant Machine and incurred the following costs in doing so:

  • Amounts paid to employees to build the machine = $120,000
  • Raw materials consumed in building the machine= $45,000
  • Manufacturing equipment depreciation attributed to contraction of Giant Machine= $25,000

For the above transaction:

Problem 1. Provide the journal entries that Richmond Pty Ltd would use for the construction of the asset

Problem 2. Assume that immediately after the journal entries in part A. have been made, new information becomes available that indicates the recoverable amount of the Giant Machine is only $160,000. Provide the adjusting journal entries.

Reference no: EM132707827

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