Manufacturing Ltd. (ML) discontinued use of three assets during 20X2:

a. A specialized piece of equipment that originally cost $200,000 when purchased was shut down and placed in the far corner of the manufacturing facility on 30 June. It is being depreciated over 20 years on a straight line basis. The carrying value (i.e., the net book value) was $50,000 at the beginning of 20X2. ML has no plans to use the equipment in the future since it was designed to produce a product MI has discontinued. Because the equipment is very specialized to the needs of MI and has no market to sell to, the salvage value is zero.

b. The company stopped using its product line B on 1 April 20X2 due to lack of demand for one of their products. Its use will be restored if and when demand picks up for that product. The product line’s original cost was $660,000, and it was 60% depreciated on 1 January 20X2.

c. ML ceased to use a company owned cargo plane on 30 September. The plane cost $7,000,000 and now has a carrying value of $2,400,000. The company plans to find a buyer as quickly as possible and has engaged a dealer to look for a buyer. The agent expects to find a buyer within the following six to eight months. The asking price is $2,000,000. The dealer will take a 3% commission on the sale.

Required:

How should each asset be reported on ML’s 20X2 year end balance sheet? Be specific as to classification and amount. Prepare journal entries to properly record the change of status of each asset.