Reference no: EM132655953

On 1 July 2016 Long Boards Ltd acquired a printing machine at a cost of $120 000. At acquisition the machine had an expected useful life of 12 000 machine hours and was expected to be in operation for four years, after which it would have no residual value. Actual machine hours were 3000 in the year ended 30 June 2017 and 3400 in the year ended 30 June 2018. On 1 July 2018 the machine was sold for $50 000.

Required:

Question 1: Prepare journal entries to record depreciation of the printing machine for each of the years ended 30 June 2017 and 30 June 2018 using the straight-line method. State the carrying amount of the machine at the end of each period. Prepare the journal entry to record the sale of the machine on 1 July 2018.

Question 2: Prepare journal entries to record depreciation of the printing machine for each of the years ended 30 June 2017 and 30 June 2018 using the declining-balance method with a depreciation rate of 40 per cent. State the carrying amount of the machine at the end of each period. Prepare the journal entry to record the sale of the machine on 1 July 2018.

Question 3: Prepare journal entries to record depreciation of the printing machine for each of the years ended 30 June 2017 and 30 June 2018 using the sum-of-digits method. State the carrying amount of the machine at the end of each period. Prepare the journal entry to record the sale of the machine on 1 July 2018.

Question 4: Prepare journal entries to record depreciation of the printing machine for each of the years ended 30 June 2017 and 30 June 2018 using the production basis. State the carrying amount of the machine at the end of each period. Prepare the journal entry to record the sale of the machine on 1 July 2018.