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Posted: June 15th, 2022
Wastewater Limited acquired an item of plant on 1 July 2012 for $ 3,660,000
Wastewater Limited acquired an item of plant on 1 July 2012 for $ 3,660,000. When the plant was acquired, it was initially assessed as having a life of 10000 hours. During the reporting period ending 30 June 2013 the plant was operated for 3000 hours. At 1 July 2013 the plant underwent a major upgrade costing $234,000. Management believes that this upgrade will add a further 2000 hours of operating time to the plant’s life. During the reporting period ended 30 June 2014 the plant was operated for 4000 hours.On 1 July 2014 the plant underwent a further major upgrade, the cost of which amounted to $344,900, and this added a further 3100 hours’ operating time to its life. During the reporting period ended 30 June 2015 the plant was operated for 3800 hours.Required:Prepare all the journal entries that Wastewater Limited would prepare for the years ending 30 June 2013, 30 June 2014 and 30 June 2015 to account for the acquisition, subsequent expenditure and depreciation of the asset.
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