The Narkaj Corp. bought a machine in year 1, for a cost of $10,000. It expected the salvage value to be $1,000, and it expected to use the machine for nine years. It actually sold the machine after two years for a price of $7,500.

A. If it used straight-line depreciation, what would be the book value of the machine after two years?

B. If it used straight-line depreciation, what would be the gain or loss on the sale of the machine?

C. If it used double declining balance depreciation, what is the depreciation expense for:

a. Year 1?

b. Year 2?

D. If it used double declining balance depreciation, what would be the book value at the end of the second year?

E. If it used double declining balance depreciation, what would be the gain or loss on the sale of the machine?