1)

Equipment was acquired at the beginning of the year at a cost of $31,500. The equipment was depreciated using the double-declining-balance method based on an estimated useful life of ten years and an estimated residual value of $610.

b. Assuming the equipment was sold at the end of year 2 for $7,280, determine the gain or loss on the sale of the equipment.

$

Loss

c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.

	Cash	fill in the blank 607d85057f91f89_2	fill in the blank 607d85057f91f89_3
	Accumulated Depreciation-Equipment	fill in the blank 607d85057f91f89_5	fill in the blank 607d85057f91f89_6
	Loss on Sale of Equipment	fill in the blank 607d85057f91f89_8	fill in the blank 607d85057f91f89_9
	Equipment	fill in the blank 607d85057f91f89_11	fill in the blank 607d85057f91f89_12

2) New tire retreading equipment, acquired at a cost of $750,000 on September 1 at the beginning of a fiscal year, has an estimated useful life of five years and an estimated residual value of $64,500. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-declining-balance method was selected.

In the first week of the fifth year, on September 6, the equipment was sold for $109,800.

Required:

1. Determine the annual depreciation expense for each of the estimated four years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by the following methods:

a. Straight-line method

Year	Depreciation Expense	Accumulated Depreciation, End of Year	Book Value, End of Year
1	$ fill in the blank 30d6daffdff0faf_1	$ fill in the blank 30d6daffdff0faf_2	$ fill in the blank 30d6daffdff0faf_3
2	$ fill in the blank 30d6daffdff0faf_4	$ fill in the blank 30d6daffdff0faf_5	$ fill in the blank 30d6daffdff0faf_6
3	$ fill in the blank 30d6daffdff0faf_7	$ fill in the blank 30d6daffdff0faf_8	$ fill in the blank 30d6daffdff0faf_9
4	$ fill in the blank 30d6daffdff0faf_10	$ fill in the blank 30d6daffdff0faf_11	$ fill in the blank 30d6daffdff0faf_12
5	$ fill in the blank 30d6daffdff0faf_13	$ fill in the blank 30d6daffdff0faf_14	$ fill in the blank 30d6daffdff0faf_15

b. Double-declining-balance method

Year	Depreciation Expense	Accumulated Depreciation, End of Year	Book Value, End of Year
1	$ fill in the blank 30d6daffdff0faf_16	$ fill in the blank 30d6daffdff0faf_17	$ fill in the blank 30d6daffdff0faf_18
2	$ fill in the blank 30d6daffdff0faf_19	$ fill in the blank 30d6daffdff0faf_20	$ fill in the blank 30d6daffdff0faf_21
3	$ fill in the blank 30d6daffdff0faf_22	$ fill in the blank 30d6daffdff0faf_23	$ fill in the blank 30d6daffdff0faf_24
4	$ fill in the blank 30d6daffdff0faf_25	$ fill in the blank 30d6daffdff0faf_26	$ fill in the blank 30d6daffdff0faf_27
5	$ fill in the blank 30d6daffdff0faf_28	$ fill in the blank 30d6daffdff0faf_29	$ fill in the blank 30d6daffdff0faf_30

Next, Journalize the entry to record the sale, assuming double-declining-balance method is used. If an amount box does not require an entry, leave it blank.

	Cash	fill in the blank a5c93d05d03c055_2	fill in the blank a5c93d05d03c055_3
	Accumulated Depreciation-Equipment	fill in the blank a5c93d05d03c055_5	fill in the blank a5c93d05d03c055_6
	Equipment	fill in the blank a5c93d05d03c055_8	fill in the blank a5c93d05d03c055_9
	Gain on Sale of Equipment	fill in the blank a5c93d05d03c055_11	fill in the blank a5c93d05d03c055_12