On January 1, Year 2, LCJ Rental Cars purchased a car that is to be used to produce rental income. The car cost $35,000. It has an expected useful life of five years and a $5,000 salvage value. The car produced rental income of $9,000 per year throughout its useful life. Assume LCJ started the Year 2 accounting period with a beginning cash balance of $40,000.

Required
a. Prepare an income statement and a statement of cash flows for Year 2, Year 3, and Year 4.
b. Determine the book value of the car for Year 2, Year 3, and Year 4.