A Special Machine Was Acquired on January 1,2001 That Cost

question 104

Essay

A special machine was acquired on January 1,2001 that cost $66,000.Estimated life was 5 years (or 50,000 units of output) and residual value $6,000.Complete the following: $\begin{array}{llc}\hline && &\text { Carrying Value } \\&& \text { Amortization } & \text { at December 31, } \\&&&2002\\&\text { Amortization Method }&\text { Expense for } 2002\\&\text { (a) Straight-line. }&\$\_\_\_&\$\_\_\_\end{array}$ (b) Sum-of-the-years'-digits. $\quad$ $___ $\quad$ $___ (c) Declining balance. $\quad$ $___ $\quad$ $___ (d) Productive output (output 2001; 6,000 ; 2002,5,000 ).... $\quad$ $___ $\quad$ $___

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Definitions:

Operating Cycle

The average time period between purchasing or acquiring inventory and receiving cash from the sale of goods or services.

Balance Date

The specific date at which the financial position of a company is measured and reported, usually marking the end of the fiscal or reporting period.

Comprehensive Income

The total change in equity for a reporting period other than from transactions with owners as owners, including both net income and other comprehensive income.

AASB 101

An accounting standard issued by the Australian Accounting Standards Board that outlines the presentation of financial statements, ensuring relevance, reliability, comparability, and understandability.