Balmoral Limited purchased equipment on January 1, 2010, for $170,000 on account. At that time, the equipment was estimated to have a useful life of five years and a $2,000 residual value. The equipment was disposed of on June 1, 2012, when the company relocated to new premises. Walker uses the diminishing-balance method with a 20% rate of depreciation and has a September 30 year end.
Instructions
(a) Record the acquisition of the equipment on January 1, 2010.
(b) Record the depreciation at September 30, 2010 and 2011.
(c) Record the disposal of the equipment on June 2, 2012, under each of the following independent assumptions:
1. It was sold for $105,000.
2. It was sold for $80,000.
3. It was retired.