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Grombi Ltd purchased a machine on the first day of their financial year: 1 January...

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Grombi Ltd purchased a machine on the first day of their financial year: 1 January 2016. The machine cost $75 000 and has an expected useful life of 10 years at which time its salvage value will be $8000. An even pattern of benefits is expected to be derived from the machine. Then on 31 December 2019 (3 years later, the machine is sold for $65 000. What are the appropriate journal entries to record the disposal of the machine in line with the requirements of AASB 116? Hint: Apply straight line method to calculate depreciation. Select one: a. Dr Cash at bank Cr Proceeds from sale of machine Dr Carrying amount of machinery sold Cr Accumulated depreciation-machine Cr Machine 65 000 65 000 54 900 20 100 75 000 b. Dr Cash at bank Dr Accumulated depreciation-machine Cr Profit on sale of machine Cr Machine 65 000 20 100 10 100 75 000 C. Dr Accumulated depreciation-machine 20,100 Dr Cash at bank 54,900 Cr Machine 75,000 d. Dr Proceeds from sale of machine 65 000 Dr Gain on sale of machine 30 100 Cr Machine 75 000 Cr Accumulated depreciation-machine 20 100

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