1. The equipment was purchased on January 5, 2011 at a cost of $90,000. The equipment had an estimated useful life of 8 years and an estimated salvage value of $8,000.
After 3 years of use of the equipment, the useful life was revised to a total of 10 years and the residual value was reduced to $2,004.
Determine the depreciation expense in a straight line for the years 2014 

2. Machinery purchased at a cost of $80,000 and on which there is accumulated depreciation of $55,000 (including depreciation from the current year to date) is exchanged for similar machinery. For financial reporting purposes, present entries to record the disposal of old machinery and the acquisition of new machinery under each of the following assumptions:

(a)	Price again, $120,000; old exchange grant, $4,000; balance paid in cash.
(b)	Price again, $120,000; trade-in allowance on old, $34,000; balance paid in cash.

3. Machinery is purchased on July 1 of the current fiscal year for $240,000. It is expected to have a useful life of 4 years, or 25,000 hours of operation, and a salvage value of $15,000. Calculate the depreciation for the last six months of the current fiscal year ending December 31 for each of the following methods:

(a)	straight line
(b)	declining balance at twice the linear rate
(C)	production units (used for 1600 hours during the current year)