Question
1) On Jan1 2015, Wax purchased equipment for $60000 cash, expecting it to remain in service for 6 years. The corporation depreciates the equipment on
1) On Jan1 2015, Wax purchased equipment for $60000 cash, expecting it to remain in service for 6 years. The corporation depreciates the equipment on a straight-line basis, with $2000 residual value. On May31 2017, the corporation sold the equipment for $18000 cash. Record both depreciation expense for 2017 and sale of the equipment on May31 2017.
2) Equipment was acquired on Jan1 2014, at a cost of $170000. The equipment was originally estimated to have a salvage value of $10000 and an estimated life of 10 years. Depreciation has been recorded through Dec31 2016, using straight-line method. On Jan1 2017, the estimated salvage value was revised to $16000 and the useful life was revised to a total of 8 years. Calculate depreciation expense for 2017 and prepare the journal entry.
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