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11.24 Osamu Ltd operates a factory that contains a large number of machines designed to produce knitted garments. These machines are generally depreciated at 10% p.a. on a straight-line basis. In general, machines are estimated to have a residual value on disposal of 10% of cost. At 1 July 2013, Osamu Ltd had a total of 64 machines, and the statement of financial position showed a total cost of $420 000 and accumulated depreciation of $130 000. During 2013-14, the following transactions occurred: (a) On 1 September 2013, a new machine was acquired for $15 000. This machine replaced two other machines. One of the two replaced machines was acquired on 1 July 2010 for $8200. It was traded in on the new machine, with Osamu Ltd making a cash payment of $8800 on the new machine. The second replaced machine had cost $9000 on 1 April 2011 and was sold for $7300. (b) On 1 January 2014, a machine that had cost $4000 on 1 July 2004 was retired from use and sold for scrap for $500. (c) On 1 January 2014, a machine that had been acquired on 1 January 2011 for $7000 was repaired because its motor had been damaged from overheating. The motor was replaced at a cost of $4800. It was expected that this would increase the life of the machine by an extra 2 years. (d) On 1 April 2014, Osamu Ltd fitted a new form of arm to a machine used for putting special designs onto garments. The arm cost $1200. The machine had been acquired on 1 April 2011 for $10 000. The arm can be used on a number of other machines when required and has a 15-year life. It will not be sold when any particular machine is retired, but retained for use on other machines. *** CHAPTER 11 Property, plant and equipment Required 1. Record each of the transactions. The end of the reporting period is 30 June. 2. Determine the depreciation expense for Osamu Ltd for 2013-14.

11.24 Osamu Ltd operates a factory that contains a large number of machines designed to produce knitted garments. These machines are generally depreciated at 10% p.a. on a straight-line basis. In general, machines are estimated to have a residual value on disposal of 10% of cost. At 1 July 2013, Osamu Ltd had a total of 64 machines, and the statement of financial position showed a total cost of $420 000 and accumulated depreciation of $130 000. During 2013-14, the following transactions occurred: (a) On 1 September 2013, a new machine was acquired for $15 000. This machine replaced two other machines. One of the two replaced machines was acquired on 1 July 2010 for $8200. It was traded in on the new machine, with Osamu Ltd making a cash payment of $8800 on the new machine. The second replaced machine had cost $9000 on 1 April 2011 and was sold for $7300. (b) On 1 January 2014, a machine that had cost $4000 on 1 July 2004 was retired from use and sold for scrap for $500. (c) On 1 January 2014, a machine that had been acquired on 1 January 2011 for $7000 was repaired because its motor had been damaged from overheating. The motor was replaced at a cost of $4800. It was expected that this would increase the life of the machine by an extra 2 years. (d) On 1 April 2014, Osamu Ltd fitted a new form of arm to a machine used for putting special designs onto garments. The arm cost $1200. The machine had been acquired on 1 April 2011 for $10 000. The arm can be used on a number of other machines when required and has a 15-year life. It will not be sold when any particular machine is retired, but retained for use on other machines. *** CHAPTER 11 Property, plant and equipment Required 1. Record each of the transactions. The end of the reporting period is 30 June. 2. Determine the depreciation expense for Osamu Ltd for 2013-14.

Financial Accounting: The Impact on Decision Makers
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles
Section: Chapter Questions
Problem 8.3E
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Exercise 11.24 DEPRECIATION CALCULATION *** Osamu Ltd operates a factory that contains a large number of machines designed to produce knitted garments. These machines are generally depreciated at 10% p.a. on a straight-line basis. In general, machines are estimated to have a residual value on disposal of 10% of cost. At 1 July 2013, Osamu Ltd had a total of 64 machines, and the statement of financial position showed a total cost of $420 000 and accumulated depreciation of $ 130 000. During 2013–14, the following transactions occurred: (a) On 1 September 2013, a new machine was acquired for $15 000. This machine replaced two other machines. One of the two replaced machines was acquired on 1 July 2010 for $8200. It was traded in on the new machine, with Osamu Ltd making a cash payment of $8800 on the new machine. The second replaced machine had cost $9000 on 1 April 2011 and was sold for $7300. (b) On 1 January 2014, a machine that had cost $4000 on 1 July 2004 was retired from use and sold for scrap for $500. (c) On 1 January 2014, a machine that had been acquired on 1 January 2011 for $7000 was repaired because its motor had been damaged from overheating. The motor was replaced at a cost of $4800. It was expected that this would increase the life of the machine by an extra 2 years. (d) On 1 April 2014, Osamu Ltd fitted a new form of arm to a machine used for putting special designs onto garments. The arm cost $ 1200. The machine had been acquired on 1 April 2011 for $10 000. The arm can be used on a number of other machines when required and has a 15-year life. It will not be sold when any particular machine is retired, but retained for use on other machines. CHAPTER 11 Property, plant and equipment 3 Required 1. Record each of the transactions. The end of the reporting period is 30 June. 2. Determine the depreciation expense for Osamu Ltd for 2013–14.
Transcribed Image Text:Exercise 11.24 DEPRECIATION CALCULATION *** Osamu Ltd operates a factory that contains a large number of machines designed to produce knitted garments. These machines are generally depreciated at 10% p.a. on a straight-line basis. In general, machines are estimated to have a residual value on disposal of 10% of cost. At 1 July 2013, Osamu Ltd had a total of 64 machines, and the statement of financial position showed a total cost of $420 000 and accumulated depreciation of $ 130 000. During 2013–14, the following transactions occurred: (a) On 1 September 2013, a new machine was acquired for $15 000. This machine replaced two other machines. One of the two replaced machines was acquired on 1 July 2010 for $8200. It was traded in on the new machine, with Osamu Ltd making a cash payment of $8800 on the new machine. The second replaced machine had cost $9000 on 1 April 2011 and was sold for $7300. (b) On 1 January 2014, a machine that had cost $4000 on 1 July 2004 was retired from use and sold for scrap for $500. (c) On 1 January 2014, a machine that had been acquired on 1 January 2011 for $7000 was repaired because its motor had been damaged from overheating. The motor was replaced at a cost of $4800. It was expected that this would increase the life of the machine by an extra 2 years. (d) On 1 April 2014, Osamu Ltd fitted a new form of arm to a machine used for putting special designs onto garments. The arm cost $ 1200. The machine had been acquired on 1 April 2011 for $10 000. The arm can be used on a number of other machines when required and has a 15-year life. It will not be sold when any particular machine is retired, but retained for use on other machines. CHAPTER 11 Property, plant and equipment 3 Required 1. Record each of the transactions. The end of the reporting period is 30 June. 2. Determine the depreciation expense for Osamu Ltd for 2013–14.
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