Question 2: Non-current assets and depreciation (15 marks)

Presented below are selected transactions for Stallone and Willis Ltd for 2019.

Jan. 1 Retired a piece of machinery that was purchased on 1 January, 2009. The machine cost $80,000 on that date, and had a useful life of 10 years with no residual value.

April 30 Sold a printing machine for $50,000 that was purchased on 1 January, 2016. The printer cost $90,000, and had a useful life of 5 years with no residual value.

Dec. 31 Discarded an equipment that was purchased on 1 January, 2018. The equipment costs $20,000 and was depreciated on an 8-year useful life with a residual value of $800. The equipment is depreciated using diminishing-balance method, with a depreciation rate 1.5 times the straight-line rate.

Required

1. Journalise all entries required as a result of the above transactions. (11 marks)

2. Do different depreciation methods lead to the recognition of different amounts of depreciation? Discuss. (4 marks)