Presented here are selected transactions for Zhou Ltd for the year ended 31 December 2016: Jan. 1 June 30 Scrapped a piece of machinery that was purchased on 1 January 2006 at a cash price of $61,380 including 10% of GST. The machinery had a useful life of 10 years with no residual value. Sold a computer that was purchased on 1 January 2013 for $35,640 cash including 10% of GST. It had a useful life of 6 years with no residual value. The computer was sold for $14,300 cash including 10% of GST. Dec. 31 Discarded a delivery truck that was purchased on 1 January 2012 for $22,770 cash including 10% of GST and was depreciated based on a 6-year useful life with a $2,070 residual value. Purchase price of machinery, computer and delivery truck includes 10% of GST. Proceeds from sale of computer includes 10% GST. Required Journalise all entries required on the listed dates, including entries to update depreciation, where applicable, on assets disposed of. Zhou Ltd uses straight-line depreciation. (Assume depreciation is up to date as of 31 December 2015 and the GST rate is 10%.) (Enter debit entries first followed by credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Zhou Ltd General Journal Date Account and explanation 2016 Jan. 1 Accumulated depreciation-machinery Machinery June 30 Depreciation expense June 30 Dec. 31 Accumulated depreciation-computer Cash GST collected Accumulated depreciation-computer Loss on disposal Computer Depreciation expense Accumulated depreciation-truck • 0 0 : # . : # # # # Debit Credit
Presented here are selected transactions for Zhou Ltd for the year ended 31 December 2016: Jan. 1 June 30 Scrapped a piece of machinery that was purchased on 1 January 2006 at a cash price of $61,380 including 10% of GST. The machinery had a useful life of 10 years with no residual value. Sold a computer that was purchased on 1 January 2013 for $35,640 cash including 10% of GST. It had a useful life of 6 years with no residual value. The computer was sold for $14,300 cash including 10% of GST. Dec. 31 Discarded a delivery truck that was purchased on 1 January 2012 for $22,770 cash including 10% of GST and was depreciated based on a 6-year useful life with a $2,070 residual value. Purchase price of machinery, computer and delivery truck includes 10% of GST. Proceeds from sale of computer includes 10% GST. Required Journalise all entries required on the listed dates, including entries to update depreciation, where applicable, on assets disposed of. Zhou Ltd uses straight-line depreciation. (Assume depreciation is up to date as of 31 December 2015 and the GST rate is 10%.) (Enter debit entries first followed by credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Zhou Ltd General Journal Date Account and explanation 2016 Jan. 1 Accumulated depreciation-machinery Machinery June 30 Depreciation expense June 30 Dec. 31 Accumulated depreciation-computer Cash GST collected Accumulated depreciation-computer Loss on disposal Computer Depreciation expense Accumulated depreciation-truck • 0 0 : # . : # # # # Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:Presented here are selected transactions for Zhou Ltd for the year ended 31 December 2016:
Jan. 1
June
30
Scrapped a piece of machinery that was purchased on 1 January 2006 at a cash price of $61,380 including 10% of GST. The machinery had a useful life of 10 years with no residual value.
Sold a computer that was purchased on 1 January 2013 for $35,640 cash including 10% of GST. It had a useful life of 6 years with no residual value. The computer was sold for $14,300
cash including 10% of GST.
Dec. 31
Discarded a delivery truck that was purchased on 1 January 2012 for $22,770 cash including 10% of GST and was depreciated based on a 6-year useful life with a $2,070 residual value.
Purchase price of machinery, computer and delivery truck includes 10% of GST. Proceeds from sale of computer includes 10% GST.
Required
Journalise all entries required on the listed dates, including entries to update depreciation, where applicable, on assets disposed of. Zhou Ltd uses straight-line depreciation. (Assume depreciation is
up to date as of 31 December 2015 and the GST rate is 10%.)
(Enter debit entries first followed by credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Zhou Ltd
General Journal
Date Account and explanation
2016
Jan. 1 Accumulated depreciation-machinery
Machinery
June 30 Depreciation expense
June 30
Dec. 31
Accumulated depreciation-computer
Cash
GST collected
Accumulated depreciation-computer
Loss on disposal
Computer
Depreciation expense
Accumulated depreciation-truck
•
0
0
:
#
.
:
#
#
#
#
Debit
Credit
Transcribed Image Text:Date Account and explanation
2016
Jan. 1 Accumulated depreciation-machinery
Machinery
June 30 Depreciation expense
June 30
Accumulated depreciation-computer
Cash
Zhou Ltd
General journal
GST collected
Computer
Dec. 31 Depreciation expense
Dec. 31
Accumulated depreciation-computer
Loss on disposal
+
Accumulated depreciation-truck
Accumulated depreciation-truck
Loss on scrapping
Delivery truck
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+
Debit
$
+
Credit
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