Beauty Company uses straight-line depreciation for a partial year rounded to the nearest whole month.On 3 September 2022, Beauty purchased a machine at a cost of $150,000. The useful life of thismachine is 5 years with a residual value of $30,000.Assume Beauty adjusts its accounts annually and the year-end date is 31 December.On 2 May 2024, Beauty sold the machine to Lucky Company for $115,000. Lucky paid Beauty incash $15,000 on the same date and promised to pay the rest by the end of July 2024.Required:(a) The "Machine" presented in the Statement of Financial Position of Beauty Company as at 31December 2023 would be:Machine (Cost)Less: Accumulated DepreciationMachine (Book Value)(3 marks)(b)Prepare the journal entries to record depreciation for 2024 up to the date of sale.(4 marks)(c)Prepare the journal entries to record the disposal of the machine on 2 May 2024.(10 marks)

The objective of the question is to calculate the book value of the machine at the end of 2023,…

Answered: Beauty Company uses straight-line…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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