Mohammad’s Company purchased an equipment on July 1, 2020 for CASH $85,000. It is estimated that the equipment will have

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Mohammad’s Company purchased an equipment on July 1, 2020 for
CASH $85,000. It is
estimated that the equipment will have a $5,000 salvage value at
the end of its 4 – year useful life.
It is also estimated that the equipment will produce total 160,000
units over its 4 – year life.
Required: Answer the following independent scenario: [2*5]
a) Record the purchase of equipment at July 1, 2020.
b) Compute the amount of Depreciation for the year ended December
31, 2013, using the
straight-line method.
c) If 20,000 units of product are produced in 2020 and 30,000 units
are produced in the year
of 2021, calculate the depreciation expense for the year of 2020
and 2021, use units-of-
activity method.
d) Assume that the equipment was purchased on 1 of January 2020,
using the double –
declining method of depreciation, what is the balance of
accumulated depreciation on
December 31, 2022?
e) Based on the information given in req (d), assume that the
equipment was sold on 1 of
January , 2023 and received $30,000 cash. Determine the gain or
loss on disposal and
record the journal.