How To Prepare Extracts Of Both The Income Statement And The Statement Of Financial Position?

Open Factory Ltd used a new machine on 1st August 2011. The costs incurred are:
$
List price of the machine 140,000
Shipping and handling 3,800
Pre-production test 12,000
4-year maintenance contract 32,000
Site preparation costs:
Waste material duct installation 10,000
Labour costs 6,000
Open Factory Ltd received an early settlement discount of 6% on the list price of the machine. The vendor provided free maintenance up to 31 March 2012. The four-year maintenance contract will start on 1 April 2012.
Open Factory Ltd incorrectly specified the waste material specifications to the contractor. As a result, the waste material duct which cost $2,000 had to be replaced with another new duct. The cost of replacement was $3,000 and was included in the waste material duct installation cost. All of the bills related to the machine had been settled by cash before 30 June 2012.
The estimated useful life of this machine is five years. At the end of this period, there will be a compulsory cost of $7,000 to dismantle the machine and $2,000 to restore the site to its original condition.
Required:
Using the above information, prepare extracts of both the income statement and the statement of financial position for the year ended 31 March 2012. Show your workings.

Both comments and pings are currently closed.

Comments are closed.

Powered by WordPress | Designed by: free css template | Thanks to hostgator coupon and web hosting reviews