Prepare general journal entries to record all transaction

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Reference no: EM132973362

Alexander Ltd completed the following transactions during 2019. The company uses sum-of- years'-digits depreciation and records depreciation to the nearest month. Ignore GST.

Jan. 5 Purchased a used machine (No. 1) for $8000 cash. The machine was painted and reconditioned at a cost of $900. During installation, one of the major components was dropped and had to be repaired at a cash cost of $300. The machine is expected to have a useful life of 4 years and a residual value of $500.

Mar. 7 Purchased land and a building with the intention of tearing down the building and constructing a new office complex. Alexander Ltd paid $140 000 for the property, plus an agent's commission of $8000 and title search fees of $2500.

Mar. 20 Paid Dan's Demolition Services $9000 to demolish the building acquired on 7 March.

Non-current assets: acquisition and depreciation 657 April 10 The company's parking area was paved at a cost of $28 000. The parking area has a useful life of 8 years with no residual value.

June 23 Purchased for cash a machine (No. 2) with a list price of $16 500. The seller granted a 4% trade discount. Transportation and freight charges of $1236 were also paid. The machine's useful life is estimated to be 5 years and its residual value $1600.

Nov. 1 Purchased for $29 000 cash a machine (No. 3) with a useful life of 8 years and a residual value of $1000.

Required

Problem (a) Prepare general journal entries to record all the transactions of Alexander Ltd.

Problem (b) Prepare an entry to record depreciation expense on 31 December 2019

Reference no: EM132973362

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