Z Limited purchases an asset for $50,000 from CashCrow Company on 1 January 2015 for cash. Z Ltd also pays for delivery of the machine and installation of the machine which cost $6,000 Record the purchase of the machine for Z Ltd Z Ltd expects to use this machine for a period of 10 years and the machine is expected to have a residual value of $2,000 Record depreciation on this machine for the year ended 31/12/2015 How Is the purchase of this machine reflected in the cashflow statement of: CashCrow Company for the year ended 31/12/2015? – cash inflow investing activities ($50,000) Z Ltd for the year ended 31/12/2015 – cash outflow investing activities ($56,000)

Z Limited purchases an asset for $50,000 from CashCrow Company on 1 January 2015 for cash. Z Ltd also pays for delivery of the machine and installation of the machine which cost $6,000 Record the purchase of the machine for Z Ltd Z Ltd expects to use this machine for a period of 10 years and the machine is expected to have a residual value of $2,000 Record depreciation on this machine for the year ended 31/12/2015 How Is the purchase of this machine reflected in the cashflow statement of: CashCrow Company for the year ended 31/12/2015? – cash inflow investing activities ($50,000) Z Ltd for the year ended 31/12/2015 – cash outflow investing activities ($56,000)

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 29CE

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