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Homework answers / question archive / On 1 July 2017, Mountains Ltd purchased a new snow-making machine for $210 000
On 1 July 2017, Mountains Ltd purchased a new snow-making machine for $210 000. The machine is estimated to have a 10-year life with a $10000 residual value.
Required:
What journal entry would Mountains Ltd make at 30 June 2018 if it uses the straight-line method of depreciation?
Computation of Depreciaion using Straight Line Method:
Annual Depreciation = (Cost of Machine - Salvage Value)/Estimated Useful Life
= ($210,000-$10,000)/10
= $200,000/10
Annual Depreciation = $20,000
