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The Christine Manufacturing, which started operat...

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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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