Equipment acquired on January 3, 2007, at a cost of $265,500, has an estimated useful life of

Question:

Equipment acquired on January 3, 2007, at a cost of $265,500, has an estimated useful life of eight years and an estimated residual value of $31,500.
a. What was the annual amount of depreciation for the years 2007, 2008, and 2009, using the straight-line method of depreciation?
b. What was the book value of the equipment on January 1, 2010?
c. Assuming that the equipment was sold on January 4, 2010, for $168,500, illustrate the effects on the accounts and of the sale.
d. Assuming that the equipment was sold on January 4, 2010, for $180,000 instead of $168,500, illustrate the effects on the accounts and of the sale.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...