Reference no: EM133018552
Question - A Firm purchased an old Machinery for $37,000 on 1 January, 2017 and spent $3,000 on its overhauling.
On 1 July 2018, another machine was purchased for $10,000.
On 1 July 2019, the machinery which was purchased on 1 January 2017, was sold for $28,000 and the same day a new machinery costing $25,000 was purchased.
On 1 July, 2020, the machine which was purchased on 1 July, 2018 was sold for $2,000.
Depreciation is charged at 10% per annum on straight line method.
Effect from 1 January, 2018, the firm changed the method and adopted reducing balance method and the rate was increased to 15% per annum.
The books are closed on 31 December every year.
Required - Prepare Machinery account for four years from 1 January, 2017.