Accounting Exercise: PANESA's Machine Purchase, Depreciation, and Sale - Prof. Rosa Rovira, Apuntes de Administración de Empresas

¡Descarga Accounting Exercise: PANESA's Machine Purchase, Depreciation, and Sale - Prof. Rosa Rovira y más Apuntes en PDF de Administración de Empresas solo en Docsity! EXERCISE 4.1. PANESA. Purchase (with related expenses), straight-line depreciation and selling of technical asset (property, plant and equipment). The company PANESA bought a machine on January 1, 2017. The price of the machine is 10.000€. Assembly costs were 1,000€. To finance the purchase of the machine on the same date, the company requested and obtained a specific loan amount 11,000€ with a maturity of one year and interest accrued at 31 December 2017 amounting to 1,100€. After the corresponding testing period, the machine is able of operation on 1 March 2017. The depreciation policy of the company for this type of technical assets is 10 years lineally. The estimated cost for dismantling and transporting the technical asset at the end of his lifespan are 1,000€ (4% discount rate). On June 30 2018 the company decided to sell the machine to another competing company that pay 12,000€ for it. To do: 1. The entries of accounting transactions associated with the first year of the machine 2. The entries related to the sale of the machine 2018. Resolution 1/1/2017 11,000€ (57)Cash (520)Current debt with financial institutions 11,000€ 11,676€ (213)Machinery (57)Cash (143)Provisions for dismantlement, removal or restoration of fixed assets 11,000€ 676€ 31/12/2017 973€ (681)Depreciation of property, plant and equipment (281)Accumulated amortization of property plant and equipment 973€ 26.6€ (669)Other financial expenses (143)Provisions for dismantlement, removal or restoration of fixed assets 26.6€ 1,100€ (662) Interest on payables (527)Current interest on debt With financial institutions 1,100€ 1/1/2018 1,100€ 11,000€ (527)Current interest on debt With financial institutions (520) Current debt with financial Institutions (57)Cash 12,100€ 30/6/2018