Able Ltd purchased machinery on 1 November 2016 for $160 000. The estimated useful life of the machinery is 8 years, with an estimated residual of $10 000. The entity's reporting period ends on 30 June, and it uses the straight-line method of depreciation. On 1 July 2017, the value in use was estimated to be $90 000 and the net selling price was $98 750. Required Prepare the journal entries in relation to the equipment from the date of acquisition. Revaluation and disposal of non-current assets. Balance date 30 June Useful life is 8 years therefore depreciation rate 12.5% Depreciation 30/6/2017 = $150,000 times 12.5% times 8/12 = $12, 500 (Why not 6/12?) Carrying amount 30/6/2017 = $160,000 - $12, 500 = $147, 500 Recoverable amount $98, 750 is the higher of the net selling price ($98, 750) and value in use ($90,000) Impairment write down = $147, 500 - $98, 750 = $48, 750 Carrying amount 30/6/2017 = $160,000 - $12, 500 = $147, 500 Recoverable amount $98.750 is the higher of the net selling price ($98, 750) and value in use ($90,000) Impairment write down = $147, 500 - $98.750 = $48.750