PART A (2 Marks):

Assume that the Electronics Computing Machine has a cost of $18,000. This machine has been used for nine years at a rate of $1,200 per annum. The company sold the machine on June 30 of the tenth year for $7,000.

Instuctions:Provide all appropriate journal entries and the calculations at the time of the disposal of the machine.

PART B (2 Marks):

Prospective Corp"s balance sheet includes the following asset:

Equipment........................................................$95,000

Less: accumulateddepreciation......................(25,000)

CarryingAmount)..........................$70,000

After performing its annual review for impairment, Cougar obtains the following data:

Asset's value inuse.........................................$58,000

Fair value less disposalcosts............................62,000

Instructions:Assuming Prospective uses the rational entity impairment model, calculate the recoverable amount,. impairment loss. prepare the entry to record the impairment loss.

All calculations must be shown to earn the credit.