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The Christine Manufacturing, which started operat...




The Christine Manufacturing, which started operations on September 1, 2002, is owned by Sheila Ltd. Sheila Ltd?s accounts at December 31 2005 included the following balances: Machinery (at cost) 91,000 Accumulated depreciation ? machinery 48,200 Vehicles (at cost; purchased November 21, 2004) 46,800 Accumulated depreciation ? vehicles 19,656 Land (at cost; purchased October 25, 2002) 81,000 Building (at cost; purchased October 25, 2002) 185,720 Accumulated depreciation ? building 28,614 Details of machines owned at December 31, 2005are as follows: Machine Purchase Date Cost useful Life Residual Value 1 October 7, 2002 $43,000 5 years $2,500 2 February 4, 2003 $48,000 6 years $3,000 Additional information: ? Sheila Ltd calculates depreciation to the nearest month and balances the records at month-end. Recorded amounts are rounded to the nearest peso, and the reporting data is December 31. ? Sheila Ltd uses straight-line depreciation for all depreciable assets except vehicles, which are depreciated on the diminishing balance at 40% p.a. ? The vehicles account balance reflects the total paid for two identical delivery vehicles, each of which cost $23,400. ? On acquiring the land and building, Sheila Ltd estimated the building?s useful life and residual value at 20 years and $5,000, respectively. The following transactions occurred from January 1, 2006. 2006 January 3 Bought a new machine (machine 3) for a cash price of $57,000. Freight charges of $442 and installation of $1,758 were paid in cash. The useful life and residual value were estimated at five years and $4,000, respectively. June 22 Bought a second-hand vehicle for $15,200 cash. Repainting cost of $655 and four new tires costing $345 were paid for in cash. August 28 Exchanged machine 1 for furniture that had a fair value of $12,500 at the date of exchange. The fair value of machine 1 at the date of exchange was $11,500. The office furniture originally cost $36,000 and, to the date of exchange, had been depreciated by $24,100 in the previous owner?s books. Sheila Ltd estimated the office furniture?s useful life and residual value at 8 years and $540, respectively. December 31 Recorded depreciation 2007 April 30 Paid for repairs and maintenance on the machinery at a cash cost of $928. May 25 Sold one of the vehicles bought on November 21, 2004 for $6,600 cash. June 26 installed a fence around the property at a cash cost of $5,500. The fence has an estimated useful life of 10 years and zero residual value. December 31 Recorded depreciation 2008 Jan 5 overhauled machine 2 at a cash cost of $12000, after which shiela ltd estimated its remaining useful life at 1 additional year and revised its residual value to $5000 june 20 traded in the remaining vehicle bought on 21 November 2004 for a new vehicle .A trade in allowance of $ 3700 was received and $22000 was paid in cash . stamp duty of $500 and registration and third party insurance of $800 were also paid for in cash . oct. 4 scrapped the vehicle bought on 22 june 2006 as it had been so badly damaged in a traffic accident that it was not worthwhile repairing it . dec.31 recorded depreciation . Required :- Prepare general journal entries to record the above transactions


Paper#13053 | Written in 18-Jul-2015

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