Assume Southern Coper Corporation (SCCO) acquired mining equipment for $100,000 cash on January 1,2016. The equipment had an expected useful life of four years and zero salvage value. SCCO calculates depreciation using the SL method over the remaining expected useful life in all cases. On dec.31, 2016 after recognizing deprecation for the year, SCCO learns that new equipment now offered on market makes the purchased equipment partially obsolete. The market value of the equipment on Dec.31, 2016, reflecting this obsolescence, is $60,000. The expected useful life does not change. On Dec,31, 2017, the market value of the equipment is $48,0000. SCCO sells the equipment on Jan. 1, 2019 for 26,000
Required:
Assume for this part that SCCO accounts for the equipment using Historical cost adjusted for depreciation and impairment losses. Using the analytical framework discussed, indicate the effects of the following events on BS and IS.
Acquisition of the equipment foe cash on Jan.1,2016.
Depreciation for 2016
Impairment loss for 2016
Depreciation 2017
Depreciation 2018
Sale of equipment on January 1,2019.