Timbertop Ltd constructed a turbo-charged, high-powered Generator and incurred the following costs in doing so:...
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Accounting
Timbertop Ltd constructed a turbo-charged, high-powered Generator and incurred the following costs in doing so:
Amounts paid to employees to build the Generator = $130,000
Raw materials consumed in building the Generator = $50,000
Manufacturing equipment depreciation attributed to construction of Generator = $25,000
For the above transactions:
A. Provide the journal entries that Timbertop Ltd would use for the construction of the asset. Show all workings
B. Assume that immediately after the journal entries in part A. have been made, new information becomes available that indicates the recoverable amount of the Generator is $160,000. Provide the adjusting journal entries.
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