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useful life of 20,000 hours, the end of their useful lives. During the first year the aircraft was operating for 2920 hours. LO 5.4 REQUIRED Prepare all journal entries necessary to account for the acquisition of the aircraft, and its depreciation, for the year ending 30 June 2014 CHALLENGING QUESTIONS 16 is depreciation an allocation process or a valuation process? Provide reasons for your answer. LO 5.1 17 At the beginning of 2011 Lorne Ltd acquired an item of machinery at a cost of 100,000. At the time it was expected that the machinery would have a useful life of ten years and a residual value of 10,000. Until the end of the 2013 finan- cial year the depreciation expense was recognised on a straight-line basis. At the beginning of the 2014 financial year, the remaining useful life was reassessed as being 11 years and the residual value was reassessed at 14,000. LO 5.3 REQUIRED ulate the depreciation expense for the 2011, 2013 and 2014 financial years. to have a useful life of five years. Both the engines and fixtures and fittings are expected to have no residual value at 16 is depreciation an allocation process UI a Valuator 17 At the beginning of 2011 Lorne Ltd acquired an item of machinery at a cost of 100,000. At the time it was expected that the machinery would have a useful life of ten years and a residual value of 10,000. Until the end of the 2013 finan- cial year the depreciation expense was recognised on a straight-line basis. At the beginning of the 2014 financial year, the remaining useful life was reassessed as being 11 years and the residual value was reassessed at 14,000. LO 5.3 REQUIRED Calculate the depreciation expense for the 2011, 2013 and 2014 financial years. of 960,000. The building was expected to have a useful life of

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