Robin Limited(‘Robin’)purchased a piece of equipment and it was fully operational as at1 February 2019. The equipment was purchased for $320,000. In addition to the purchase price, Robinspent $40,000 to transport the equipment on site and $60,000 of engineering fees to set-up the equipment. It had an estimated useful life of 10 years and an estimated residual value of $60,000. Each year $6,000 is spent on repairs and maintenance. On 1 July 2021, $80,000 was spent on a major upgrade after which the equipment had an expected useful life of 5 years from the date of the upgrade with a revised residual value of $38,000. On 1 March 2023, the equipment was sold for $120,000 cash. Robin’s financial year end balance date is 30 June and Robinuses straight-line depreciation. Record the journal entries required for the disposal of the equipment as at 1 March 2023.
Robin Limited(‘Robin’)purchased a piece of equipment and it was fully operational as at1 February 2019. The equipment was purchased for $320,000. In addition to the purchase price, Robinspent $40,000 to transport the equipment on site and $60,000 of engineering fees to set-up the equipment. It had an estimated useful life of 10 years and an estimated residual value of $60,000. Each year $6,000 is spent on repairs and maintenance. On 1 July 2021, $80,000 was spent on a major upgrade after which the equipment had an expected useful life of 5 years from the date of the upgrade with a revised residual value of $38,000. On 1 March 2023, the equipment was sold for $120,000 cash. Robin’s financial year end balance date is 30 June and Robinuses straight-line depreciation. Record the journal entries required for the disposal of the equipment as at 1 March 2023.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Robin Limited(‘Robin’)purchased a piece of equipment and it was fully operational as at1 February 2019. The equipment was purchased for $320,000. In addition to the purchase price, Robinspent $40,000 to transport the equipment on site and $60,000 of engineering fees to set-up the equipment. It had an estimated useful life of 10 years and an estimated residual value of $60,000. Each year $6,000 is spent on repairs and maintenance. On 1 July 2021, $80,000 was spent on a major upgrade after which the equipment had an expected useful life of 5 years from the date of the upgrade with a revised residual value of $38,000. On 1 March 2023, the equipment was sold for $120,000 cash. Robin’s financial year end balance date is 30 June and Robinuses straight-line depreciation.
Record the journal entries required for the disposal of the equipment as at 1 March 2023.
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