ABC Ltd acquired equipment at a cost of $120,000 three years ago.

The following data pertain to the equipment:

The estimated useful life is 12 years.

The remaining useful life is 9 years.

The equipment has no residual value.

Other information:

ABC Ltd can sell the equipment at $88,000 and the current cost of disposal is $7,000 at the end of year 3.

The equipment has 9-year remaining life, which is expected to reduce operating costs by $13,000 per year.

Shareholders of ABC Ltd expect an 8% discount rate.

1) The carrying amount of the equipment at the end of year 3 is:

2) The net selling price of the equipment at the end of year 3 is:

3) The value in use of the equipment at the end of year 3 is:

4) Does this equipment need to be impaired? Why or why not?

If an asset impairment is needed, what are the journal entries to recognise asset impairment loss at the end of year 3?

5) How much is the year 4 depreciation?