Cars and Trucks Ltd Owns an Engine Testing Machine Which

question 45

Multiple Choice

Cars and Trucks Ltd owns an engine testing machine which was purchased for $120 000.After 3 years of use the machine had accumulated depreciation of $58 560 but was revalued to $80 000.Two years later the machine was sold for $60 000 and had accumulated depreciation at the time of sale of $36 800.What journal entries would be required to record the sale of the machine in accordance with AASB 116 requirements?

• A)
• \[\begin{array} { | l | l | r | r | }
• \hline \mathrm { Dr } & \text { Cash at bank } & 60000 & \\
• \hline \mathrm { Cr } & \text { Proceeds from testing machine sold } & & 60000 \\
• \hline & & & \\
• \hline \mathrm { Dr } & \text { Accumulated depreciation } & 95360 & \\
• \hline \mathrm { Dr } & \text { Carrying amount of testing machine sold } & 24640 & \\
• \hline \mathrm { Cr } & \text { Testing machine } & & 120000 \\
• \hline
• \end{array}\]
• B)
• \[\begin{array} { | l | l | r | r | }
• \hline \mathrm { Dr } & \text { Cash at bank } & 60000 & \\
• \hline \mathrm { Cr } & \text { Profit on sale of land } & & 35360 \\
• \hline \mathrm { Cr } & \text { Testing machine } & & 24640 \\
• \hline
• \end{array}\]
• C)
• \[\begin{array} { | l | l | r | r | }
• \hline \mathrm { Dr } & \text { Cash at bank } & 60000 & \\
• \hline \mathrm { Cr } & \text { Proceeds from sale of land } & & 60000 \\
• \hline & & & \\
• \hline \mathrm { Dr } & \text { Carrying amount of land sold } & 43200 & \\
• \hline \mathrm { Dr } & \text { Accumulated depreciation } & 36800 & \\
• \hline \mathrm { Cr } & \text { Testing machine } & & 80000 \\
• \hline
• \end{array}\]
• D)
• \[\begin{array} { | l | l | r | r | }
• \hline \mathrm { Dr } & \text { Cash at bank } & 60000 & \\
• \hline \mathrm { Dr } & \text { Accumulated depreciation } & 36800 & \\
• \hline \mathrm { Cr } & \text { Profit from sale of testing machine } & & 16800 \\
• \hline \mathrm { Cr } & \text { Testing machine } & & 80000 \\
• \hline
• \end{array}\]

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Definitions:

Liquid Stool

Stool that is more liquid than solid, often indicating diarrhea or a gastrointestinal condition affecting digestion and absorption.

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The presence of blood in the feces that is not visible to the naked eye, often a sign of gastrointestinal diseases.

False-negative

A test result that incorrectly indicates the absence of a condition or disease when it is actually present.

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Surgical procedures that create an opening from the colon to the surface of the abdomen, allowing for the diversion of bowel contents.