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P9-6A Altona Limited purchased delivery equipment on March 1, 2016, for $130,000 cash. At that time,...

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Accounting

P9-6A Altona Limited purchased deliveryequipment on March 1, 2016, for $130,000 cash. At that time, theequipment was estimated to have a useful life of five years and aresidual value of $10,000. The equipment was disposed of onNovember 30, 2018. Altona uses the diminishing-balance method atone time the straight-line depreciation rate, has an August 31 yearend, and makes adjusting entries annually. Please show steps.

Instructions

(a) Record the acquisition of equipment on March 1, 2016.

(b) Record depreciation at August 31, 2016, 2017, and 2018.

(c) Record the disposal of the equipment on November 30, 2018,under each of the following independent assumptions:

  1. It was sold for $60,000.
  2. It was sold for $80,000.
  3. It was retired for no proceeds.

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