Equipment acquired on January 8, 20Y1, at a cost of $280,000, has an estimated useful life of

Question:

Equipment acquired on January 8, 20Y1, at a cost of $280,000, has an estimated useful life of 8 years and an estimated residual value of $30,000.
a. What was the annual amount of depreciation for the years 20Y1, 20Y2, and 20Y3, using the straight-line method of depreciation?
b. What was the book value of the equipment on January 1, 20Y4?
c. Assuming that the equipment was sold on January 7, 20Y4, for $185,000, illustrate the effects on the accounts and of the sale.
d. Assuming that the equipment was sold on January 7, 20Y4, for $192,400 instead of $185,000, 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...