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3- On 1 January 2019, XYZ Company purchased equipment for 21,000. The sales tax on the purchase, freight charges, and installation costs ware 1000. It
3- On 1 January 2019, XYZ Company purchased equipment for 21,000. The sales tax on the purchase, freight charges, and installation costs ware 1000. It is estimated that the equipment has a useful life of 5 years and its residual (salvage) value is 2,000. Required: a) Calculate the cost of the equipment at the purchase date. b) Compute the annual depreciation using the straight-line method. c) Compute the book value of the equipment on Dec. 31, 2019. d) If XYZ company chooses to use the revaluation model, the fair value of the equipment on December 31, 2019 is 15,000 what is the journal entry necessary at Dec. 31, 2020. e) If XYZ company will continue using the revaluation model on Dec. 31, 2020, and the fair value of the equipment on December 31, 2020 is 19,000 what is the journal entry necessary at Dec. 31, 2020
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