STAR Ltd's financial year ends on 31 December 2022.On 1 October 2022, STAR Ltd purchased a machine. To prepare the machine for use,the following payments were made on the same day:Cash paymentTransportation cost$201,0005,000Installation costSpecial platform required for installationMachine operator's salary for the month*2,4001,5003,500*This refers to the salary of the machine operator who was recruited in September tooperate the machine when it is operational.The company estimates the machine will be used for five years and have a $12,400residual value.Identify and compute the cost of the machine to be recognised. Justify your answer.Journalise the transactions. Assume the above payments are paid in cash. Narration isnot required.Compute the depreciation expense for the year ended 31 December 2022 using thestraight-line method. Round your answer to the nearest $.Compute the depreciation expense for the year ended 31 December 2022 using thedouble declining balance method. Round your answer to the nearest $.

Part 2: ExplanationStep 1: Add all the payments made to prepare the machine for use:$201,000 (cash…

Answered: STAR Ltd's financial year ends on 31…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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