ermont Company, which has a June 30 fiscal year-end and reports under ASPE, sells ice cream. It bought manufacturing equipment on July 1, 2019 with cash at a purchase price of $250,000. Not included in this $250,000 is an additional $50,000 for freight and $5,000 for transit insurance. All these costs are subject to tax, and Vermont Company is in a province with 5% GST and 5% PST (combined tax rate of 10%). The manufacturing equipment is estimated to have a useful life of 10 years with a $50,000 residual value. Vermont Company employs straight line depreciation. At the end of its 2020 fiscal year, depreciation was recorded, and the manufacturing equipment was ascertained to have undiscounted future net cashflows of $240,000. On June 30, 2021, Vermont Company sold the manufacturing equipment for $225,000. Required Prepare all required journal entries in good form for 2019, 2020 and 2021
Vermont Company, which has a June 30 fiscal year-end and reports under ASPE, sells ice cream. It
bought manufacturing equipment on July 1, 2019 with cash at a purchase price of $250,000. Not
included in this $250,000 is an additional $50,000 for freight and $5,000 for transit insurance. All these
costs are subject to tax, and Vermont Company is in a province with 5% GST and 5% PST (combined
tax rate of 10%).
The manufacturing equipment is estimated to have a useful life of 10 years with a $50,000 residual
value. Vermont Company employs straight line
depreciation was recorded, and the manufacturing equipment was ascertained to have undiscounted
future net cashflows of $240,000. On June 30, 2021, Vermont Company sold the manufacturing
equipment for $225,000.
Required
Prepare all required
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