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Financial Accounting

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ACT 112 Principles of Accounting I Assignment # 3 (10 marks) Due Date: April 24th, 2015 A. Wales Company acquired equipment on November 20, 2013. The equipment cost AED 250,000. Transportation and installation costs amounted to AED 50,000. Costs of testing the equipment prior to its use in the production process were AED 20,000. The costs of training the Company’s employees of how to operate the new equipment were AED 30,000. The equipment was put into service on January 1, 2014. The Company’s year-end is December 31. The equipment is estimated to have a useful life of 10 years with a residual value (salvage value) of AED 30,000. Required: 1. Calculate the cost of the equipment as at January 1, 2014 (1 mark) 2. Give the journal entry (or entries) to record the cost of equipment on the books of Wales Company (1 mark) 3. Calculated the amount of depreciation expense for the years 2014 and 2015 using the straight-line method (1 mark) 4. Show how the equipment would appear on a classified partial balance sheet of the Company at the end of 2015 (1 marks). 5. Assume the Company sold the equipment on January 1, 2021 for AED 95.000. Give the journal entry (entries) to record the sale of the equipment (1 mark). 6. Visit the webpage of Dubai Financial Market and look at the financial statements of one of the listed company and identify the Company and the depreciation method used in your answer (2 marks). B. Assume that Wales Company uses the double-declining balance method of depreciation. Prepare a depreciation schedule for the first 3 years of the life of the equipment (3 marks)