1)

On January 1 Yr1, you purchased a piece of equipment for $50,000. You expect to use this equipment for 5 yrs.

a)

What is the depreciation expense for yr 1 using the straight-line method?

b)

What is the net book value of the equipment at the end of year 2?

c)

Assuming the equipment was sold on Dec 31 Yr4, for $10,000 what is the gain or loss?

2)

On July 1 Yr1, you purchased a building for $ 750,000. It was determined that the estimated useful life of the building is 25 yrs.

a)

What is the depreciation expense for yr 1 using the straight-line method?

b)

What is the depreciation expense for yr 2?

c)

Assuming the building was sold on Dec 31 Yr25, for $100,000 what is the gain or loss?

3)

On Jan. 1 Yr1 you purchased $100,000 of intangibles. $50,000 is for goodwill and $50,000 is for a patent with an estimated useful life of 20 yrs.

In Yr 2, goodwill was valued at $40,000 and the patent was disposed off as off 12/31.

a)

What is the entry required for goodwill in Yr 2?

b)

What is the balance in Accumulated Amortization at the date of disposal?