QUESTION 8 On 1 July 2016, Combi Ltd. purchased a new machine. The machine had...
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QUESTION 8 On 1 July 2016, Combi Ltd. purchased a new machine. The machine had a recommended retail price of $54,000 plus GST, but after careful negotiation it was purchased for $50,000, plus 10% GST. The delivery of the machine cost $900 plus GST installation was $1200 plus GST and Testing charges 400 plus GST. The estimated life of the machine is to be 5 years, the residual value has been estimated to be $8,000. Maintenance costs of $1,200 (plus GST) for the machine were paid in cash on December 1, 2016. Combi Ltd uses the straight-line method for depreciation. REQUIRED: Prepare general journal entries to record the following transactions. (Narrations are not required) a) The purchase of the new machine on July 1, 2016. b) Paid maintenance cost of $1,200 plus GST on 1 December 2016 c) The depreciation charge for the reporting period ended 30 June 2017
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