Star Ltd purchased new equipment for $60 000 on 2 July 2019. The equipment was expected to

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Star Ltd purchased new equipment for $60 000 on 2 July 2019. The equipment was expected to have a $10 000 residual value at the end of its 8‐year useful life. Straight‐line depreciation has been recorded. While reviewing the accounts in anticipation of adjusting them for the annual financial reports for the year ended 30 June 2022, Star Ltd decided that the useful life of the equipment should be extended by 2 years, and that the residual value should be revised to $6000. Ignore GST.

Required

(a) Give the general journal entry to record depreciation expense on the equipment for the year ended 30 June 2022.

(b) Calculate the carrying amount of the equipment at 30 June 2022.

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Financial Accounting

ISBN: 9780730363217

10th Edition

Authors: John Hoggett, John Medlin, Keryn Chalmers, Claire Beattie, Andreas Hellmann, Jodie Maxfield

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