Questions

MCD1010 - T3 - 2024 BDA - Reducing balance depreciation

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Question textExpress Deliveries have a conveyor machines that are depreciated using the reducing balance depreciation method. Machines were purchased on 1 July 2019 and cost $350,000 and as the machines age they will require more maintenance. The machines will be used for 4 years and after this time they will be sold off for parts. It is expected the sale of parts could recover $130,000. Express Deliveries have applied a rate of 22% for similar type machines. Complete the journal entries for depreciation for each year (Do not include $ or , or decimal places in your amount) [table] Date | Details | $ | $ 30/6/20 | Answer 1 Question 1 BankConveyor MachinesVan ExpenseDepreciation ExpenseAccumulated Depreciation | Answer 2 Question 1 | | Answer 3 Question 1 BankConveyor MachinesVan ExpenseDepreciation ExpenseAccumulated Depreciation | | Answer 4 Question 1 | | | Book Value of Machine 1/7/20: 350,000 - Answer 5 Question 1 = Answer 6 Question 1 30/6/21 | Answer 7 Question 1 BankConveyor MachinesVan ExpenseDepreciation ExpenseAccumulated Depreciation | Answer 8 Question 1 | | Answer 9 Question 1 BankConveyor MachinesVan ExpenseDepreciation ExpenseAccumulated Depreciation | | Answer 10 Question 1 | | | Book Value of Machine 1/7/21: 350,000 - Answer 11 Question 1 = Answer 12 Question 1 30/6/22 | Answer 13 Question 1 BankConveyor MachinesVan ExpenseDepreciation ExpenseAccumulated Depreciation | Answer 14 Question 1 | | Answer 15 Question 1 BankConveyor MachinesVan ExpenseDepreciation ExpenseAccumulated Depreciation | | Answer 16 Question 1 | | | Book Value of Machine 1/7/22: 350,000 - Answer 17 Question 1 = Answer 18 Question 1 30/6/23 | Answer 19 Question 1 BankConveyor MachinesVan ExpenseDepreciation ExpenseAccumulated Depreciation | Answer 20 Question 1 | | Answer 21 Question 1 BankConveyor MachinesVan ExpenseDepreciation ExpenseAccumulated Depreciation | | Answer 22 Question 1 [/table]

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The scenario describes Express Deliveries using the reducing balance (diminishing balance) depreciation method at 22% per year on a machine that costs 350,000, with a 4-year life and an expected salvage value from parts of 130,000 at the end. We’ll walk through the depreciation for each year and explain how the journal entries would be reflected, along with why each provided value fits or does not fit. - Year 1 starting point: cost = 350,000. Under reducing balance at 22%, depreciation for the first year is 350,000 × 0.22 = 77,000. The book value at 30/06/2020 becomes 350,000 − 77,000 = 273,000. This aligns with the idea that the depreciation amount to be recorded in Year 1 is 77,000, and the end-of-year carrying amount is 273,000. The corresponding entry would debit Depreciation Expense (and credit Accumulated Depreciation) for 77,000; this would impact the Bank/Receivable and other lines only if specific formatting requires a separate cash effect, but typically depreciation affects expense and accumulated depreciation. - Year 2 starting poin......Login to view full explanation

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