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Wastewater Limited acquired an item of plant on 1 July 2012 for $3 660 000....

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Accounting

Wastewater Limited acquired an item of plant on 1 July 2012 for $3 660 000. When the item of plant was acquired, it was initially assessed as having a useful life of 10 000 hours. During the reporting period ending 30 June 2013 the plant was operated for 3 000 hours. At 1 July 2013 the plant had a remaining useful life of 7 000 hours. On 1 July 2013 the plant underwent a major upgrade costing $234 600. Management believes that this upgrade will add a further 2 000 hours of operating time to the plants life. During the reporting period ended 30 June 2014 the plant was operated for 4 000 hours. On 1 July 2014 the plant underwent further major upgrade, the cost of which amounted to $34 400, and this added a further 3 100 hours operating time to its life. During the reporting period ending 30 June 2015 the plant was operated for 3 800 hours.

Required: Prepare all the journal entries that Wastewater Limited would prepare for the years ending 30 June 2013, 30 June 2014 and 30 June 2015 to account for the acquisition, subsequent expenditure and depreciation on the asset.

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