1. On January 1, 2018, Sanderson Company acquired a machine for $1,060,000.

The estimated useful life of the asset is five years. Residual value at the end of five years is estimated to be $109,000.

What is the book value of the machine at the end of 2019 if the company uses the straightline

method of depreciation?

2. An asset was purchased for $33,000 on January 1, 2019. The asset's estimated useful life was five years, and its residual value was $4,000. The straight-line method of depreciation was used. Calculate the gain or loss if the asset is sold for $26,000 on December 31, 2019, the last day of the accounting period.