Calculate the carrying amount of the cash registers

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Question - Samantha Cairns operates a small grocery store in Port Macquarie. On the 1 April 2019 she purchased two new cash registers at a cost $30,000 each. She estimated that each cash register would have a useful life of 6 years and the economic benefits of each cash register would be consumed equally over its useful life. Samantha expected each cash register could be sold for $3,000 at the end of its useful life.

Narrations are not required for the journal entries.

Required -

a) Prepare the journal entries to record the depreciation expense for the year ending 30 June 2019 and 2020?

b) Calculate the carrying amount of the cash registers for the year ending 30 June 2021?

c) On 31 December 2021, Samantha decided to sell her delivery truck for $10,000 as it needed significant repairs. She had purchased the truck on 1 July 2020 for $45,000 and depreciated it using a diminishing balance depreciation rate of 20%. The truck had a useful life of 10 years and a residual value of $5,000. Prepare the journal entry to record the disposal of the delivery truck on 31 December 2021.

Reference no: EM133065204

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