1) XYZ Company purchased machinery on October 1, 2015 for $106,000. The equipment has an estimated useful life of 8 years and an estimated residual value of $10,000. The equipment is expected to be used for 60,000 hours. During 2015, the equipment was used for 5,000 hours and during 2016, the equipment was used for 15,000 hours. Calculate depreciation expense for 2015 and 2016 under each of the following methods. 2016 Depreciation Method Straight-line Double-declining balance Units-of-production 2015 2) Prepare journal entries for the following transactions. 2015 Jan. 1 May 1 Dec. 31 Purchased equipment for $40,000 cash, $4,000 residual value, 10-year estimated life, straight-line depreciation. Purchased a building for $90,000, $4,000 residual value, 20-year estimated life, double-declining balance depreciation. Recorded depreciation for the equipment. Recorded depreciation for the building. Dec. 31 2016 Sold the equipment for $25,000 cash. (Record depreciation to date for 2012 before selling equipment.) Recorded depreciation for the building. June 30 Dec. 31