Sama Manufacturing uses general journal to record its day-to-day business transactions.
Sama Manufacturing uses general journal to record its day-to-day business transactions. Sama recently purchased a production plant to increase the production volumes. Sequence of the transactions relating to the plant are given below:
a. On 1 January 2012, purchased a plant for PKR 2,000,000 cash
b. On 31 December 2012, recorded depreciation expense using sum of years digit method with 5 years of useful life and zero salvage value at the end of useful life
c. On 1 January 2013, Sama replaced the old plant at 90% book value with a new plant for PKR 3,000,000
Record the general journal entries using the above sequence of transactions. (Show working)