On 1 July 2012, Engineering Ltd purchased land $1 200 000 and buildings $500 000.
The estimated useful life of the buildings was 40 years, with a residual value of nil.
On 1 October 2012 machinery was purchased at a total cost of $120 000. The
estimated useful life of the machinery was 4 years with an estimated residual value
of $9000. Engineering Ltd uses straight-line depreciation for buildings and the
diminishing-balance method for machinery. The entity's reporting period ends on 30
June.
(a) Prepare journal entries to record the purchase of the land, buildings and
machinery during the year.
(b) Prepare journal entries to record the depreciation expense for the year ended
30 June 2013.
(c) Assume that on 1 July 2013 the entity revalued the land upwards by $200 000
and the buildings downwards by $25 000. Prepare the journal entries for the
revaluations.
(d) On 31 December 2013, owing to a change in product mix, the machinery was
sold for $50 000. Prepare the journal entry(ies) to dispose of the machinery.
If it is not much trouble, please help me with these questions, I would greatly appreciate it.
