Financial Accounting

Running head: FINANCIAL ACCOUNITNG
Financial Accounting
Name of the Student:
Name of the University:
Author’s Note:

1FINANCIAL ACCOUNTING
Table of Contents
Answer to question 4:.................................................................................................................2
Answer to question 5:.................................................................................................................2
References and bibliography:.....................................................................................................5

2FINANCIAL ACCOUNTING
Answer to question 4:
Dragon’s Fire Pty Ltd
General Journal
Date Particulars Debit Credit
30-Jun Machinery $ 9,000
Machinery Disposal Expense $ 700
GST Paid $ 970
Bank $ 10,670
(To record machinery overhauled and
machinery disposal expenses paid)
Computation of Revised depreciation after the machine was overhauled:
Fair Value of Machinery as on 1 July 2019 $ 1,80,000
Less: Residual Value $ 3,758
Depreciable Amount $ 1,76,242
Total estimated working hour of the machine 40,000
Working hours in first three years (13000+10000+8000) 31,000
Depreciation charged in first three years ((176242/40000)*31000) $ 1,36,588
Written down value as on 1 July 2022 (180000-136588) $ 43,412
Add: Addition on 1 July 2022 $ 9,000
Total Value as at 1 July 2022 $ 52,412
Less: Estimated residual value $ 4,000
Depreciable amount as at 1 July 2022 $ 48,412
Working hours left for the next two years 9,000
Add: Additional working hours 16,000
Total estimated working hours remaining as at 1 July 2022 25,000
Depreciation in the fourth year ((48412/25000)*(5000+4000)) $ 27,111
Depreciation in the fifth year ((48412/25000)*(4000+4000)) $ 15,492
Depreciation in the sixth and seventh year ((48412/25000)*4000) $ 7,746
Answer to question 5:
Depreciation is the gradual decrease in the value of a tangible fixed asset due to
natural wear and tear or any other factors. When an asset is purchased the total cost of
purchase and all the incidental expenses which are incurred to bring the asset in usable