QUESTION 11

1. Pei Corporation purchased a manufacturing equipment on December 31, 2019. The cost of the equipment was $89,000, the expected useful life was 5 years, and the residual value was estimated to be $9,000. Pei uses straight-line method for depreciation and the revaluation model with asset adjustment method to account for balance in the Accumulated Depreciation account.

   At December 31, 2020, the equipments fair value was appraised to be $78,000, with the remaining useful life of four years and residual value of $10,000.

   At December 31, 2021, there was no formal revaluation performed. The equipment is sold on March 31, 2022, for $55,000.

   Instructions:

   Prepare journal entries for:

   (1) the year ended December 31, 2020. Round answers to 0 decimal places.

   (2) the year ended December 31, 2021. Round answers to 0 decimal places.

   (3) the period ended March 31, 2022. Round answers to 0 decimal places.