BlossomCo. purchased equipment on March 1, 2019, for $130,000on account. The equipment had an estimated useful life of five years, with a residual value of $5,000. The equipment is disposed of on February 1, 2022.BlossomCo. uses the diminishing-balance method of depreciation with a 20% rate and calculates depreciation for partial periods to the nearest month. The company has an August 31 year end.

Record the acquisition of the equipment on March 1, 2019.

Date

Account Titles and Explanation

Debit

Credit

Mar. 1

(To record purchase of equipment on account.)

Record depreciation at August 31, 2019, 2020, and 2021.

2019

Date

Account Titles and Explanation

Debit

Credit

Aug. 31

(To record depreciation expense.)

2020

Date

Account Titles and Explanation

Debit

Credit

Aug. 31

(To record depreciation expense.)

2021

Date

Account Titles and Explanation

Debit

Credit

Aug. 31

(To record depreciation expense.)

Record the disposal on February 1, 2022, under the following assumptions:

1.It was scrapped with no residual value.

2.It was sold for $73,360.

3.It was sold for $63,470.

4.It was traded for new equipment with a list price of $97,500.Blossomwas given a trade-in allowance of $53,500on the old equipment and paid the balance in cash.Blossomdetermined the old equipment's fair value to be $65,620at the date of the exchange.

Date

Account Titles and Explanation

Debit

Credit

2022

Feb. 1

(To record depreciation expense.)1

1.Feb. 1

(To record disposal.)

2.Feb. 1

(To record disposal.)

3.Feb. 1

(To record disposal.)

4.Feb. 1

(To record disposal.)