On 30 June 2017 You Can Cook Pty Ltd purchased equipment at a cost of $625,000 (GST exclusive) with an estimated useful life of 10 years and no residual value. On 30 June 2020, the equipment had a carrying amount of $437 500.

On 30 June 2020 the same item of equipment was determined as having a recoverable amount of $350 000 and a remaining useful life of 7 years.

On 30 June 2023, the equipment was assessed as having a recoverable amount of $260 000 and a remaining useful life of 3 years.

All equipment is carried under the cost model.

Prepare the general journal entries to record the impairment of equipment and depreciation

under the cost model on 30 June 2020, 30 June 2023 and 30 June 2024.

Answer rating: 100% (QA)

Cost method is the method in which noncurrent asset will present at carrying value in the balance sh... View the full answer