A company’s accountant has started the PPE and Depreciation Schedule for the year ended September 30, 2023. The company’s, the depreciation policy is to apply one month’s ownership, one month’s depreciation. The team was provided with the following information. Land and Building were acquired for $800 000 in a lump sum purchase. At the time of acquisition, the appraised values of the land and building were $90 000 and $810 000 respectively. Equipment with an appraised value and residual value of $40 000 and $3 000 respectively was received by the company as a donation. Machinery costing $182 900 inclusive of $600 installation expense and $14 900 normal repair and maintenance cost, and with a $6 000 estimated salvage value was sold on February 1, 2023. Required: Complete the PPE and Depreciation Schedule below by providing the values for [a] [b] [f] [g] [i] [j] Please show all workings and explanations Annual Depreciation Expense at September 30 Assets Date of Acquisition Cost Residual Value Depreciation Method Estimated Useful Life (years) 2022 2023 Land Oct 1, 2021 [a] - - - - - Building Oct 1, 2021 [b] $40 000 SLM [c] $13 600 [d] Equipment Oct 2, 2021 [e] 3 000 150% declining balance 10 [f] [g] Machinery Oct 2, 2021 [h] 6 000 SYD 8 [i] [j]

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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A company’s accountant has started the PPE and Depreciation Schedule for the year ended September 30, 2023. The company’s, the depreciation policy is to apply one month’s ownership, one month’s depreciation. The team was provided with the following information.

Land and Building were acquired for $800 000 in a lump sum purchase. At the time of acquisition, the appraised values of the land and building were $90 000 and $810 000 respectively.
Equipment with an appraised value and residual value of $40 000 and $3 000 respectively was received by the company as a donation.
Machinery costing $182 900 inclusive of $600 installation expense and $14 900 normal repair and maintenance cost, and with a $6 000 estimated salvage value was sold on February 1, 2023.

Required:

Complete the PPE and Depreciation Schedule below by providing the values for

[a]

[b]

[f]

[g]

[i]

[j]

Please show all workings and explanations

						Annual Depreciation Expense at September 30
Assets	Date of Acquisition	Cost	Residual Value	Depreciation Method	Estimated Useful Life (years)	2022	2023
Land	Oct 1, 2021	[a]	-	-	-	-	-
Building	Oct 1, 2021	[b]	$40 000	SLM	[c]	$13 600	[d]
Equipment	Oct 2, 2021	[e]	3 000	150% declining balance	10	[f]	[g]
Machinery	Oct 2, 2021	[h]	6 000	SYD	8	[i]	[j]

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why was 3/12 used for the double declining method for equipment when the asset was acquired on Oct 2, 2021 and their financial year ended on Sept 30, 2022?

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