Reference no: EM132066560

Question - Dove Ltd operates a factory that contains a large number of machines designed to produce knitted garments. These machines are generally depreciated at 10% p.a. on a straight-line basis. In general, machines are estimated to have a residual value on disposal of 10% of cost. At 1 July 2017, Dove Ltd had a total of 64 machines, and the statement of financial position showed a total cost of $445,000 and accumulated depreciation of $138,000. During 2017-18, the following transactions occurred:

1. On 1 September 2017, a new machine was acquired for $16,000. This machine replaced two other machines. One of the two replaced machines was acquired on 1 July 2014 for $8,700. It was traded in on the new machine, with Dove Ltd making a cash payment of $9,300 on the new machine. The second replaced machine had cost $9,500 on 1 April 2015 and was sold for $7,700.

2. On 1 January 2018, a machine that had cost $4,200 on 1 July 2008 was retired from use and sold for scrap for $530.

3. On 1 January 2018, a machine that had been acquired on 1 January 2015 for $7,400 was repaired because its motor had been damaged from overheating. The motor was replaced at a cost of $5,100. It was expected that this would increase the life of the machine by an extra 2 years.

4. On 1 April 2018, Dove Ltd fitted a new form of arm to a machine used for putting special designs onto garments. The arm cost $1,300. The machine had been acquired on 1 April 2015 for $10,600. The arm can be used on a number of other machines when required and has a 15-year life. It will not be sold when any particular machine is retired, but retained for use on other machines.

Record each of the transactions. The end of the reporting period is 30 June.