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Brisbane Connection purchased an item of equipment for cash $84,700 including 10% GST on 1 July 2019. It is expected that the useful life of the equipment will be 8 years and the residual value will be $5,000. The entity adopts the straight-line depreciation method.
Required:
Problem 1: Prepare the journal entry to record the purchase of the equipment in 2019.
Problem 2: Calculate the depreciation expense of this equipment each year and prepare the journal entry for the year ending 30 June 2020.
Problem 3: Show the reporting of this equipment in the balance sheet on 30 June 2020 and 30 June 2021.
Problem 4: Assume the equipment was sold on 1 January 2021 for $51,000 (ignore GST). Prepare the general journal entries to record the sale of the equipment.
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