Summers Ltd purchased a new forklift for the warehouse for ($90) 000 on 2 July 2023. The
Question:
Summers Ltd purchased a new forklift for the warehouse for \($90\) 000 on 2 July 2023. The forklift was expected to have an \($8\) 000 residual value at the end of its 4-year useful life. Management have assigned the straight-line depreciation method as the basis to record annual depreciation for this asset. While reviewing the accounts at the end of the financial year for 30 June 2026, management decided the useful life of the forklift would be 3 more years, applying from the 1 July 2026 and the residual value should be revised to \($4\) 000. Ignore GST.
Required
(a) Prepare the general journal entry to record the depreciation expense for the forklift for the year ended 30 June 2026.
(b) Calculate the carrying amount of the equipment at 30 June 2026.
(c) Prepare the general journal entry to record the depreciation expense for the forklift for the year ended 30 June 2027.
Step by Step Answer:
Accounting
ISBN: 9780730382737
11th Edition
Authors: John Hoggett, John Medlin, Keryn Chalmers, Claire Beattie