14 eBook esset Disposal Assume that Gonzalez Company purchased an asset on January 1, 2015, for $74,000. The asset had an estimated life of six years and an estimated residual value of $7,400. The Company used the straight-line method to depreciate the asset. On July 1, 2017, the asset was sold for $48,700, Required: 1. Identity and analyze the effect of the transaction for depreciation for 2017 Activity Operating Accounts Depreciation Expense Increase, Accumulated Depreciation - Asset Increase Statement(s) Balance Sheet and Income Statement How does this entry affect the accounting equation if a financial statement item is not affected, select "No Entry and leave the amount box blank. If the effect on a financial statement item is negative, Le, a decrease be sure to enter the answer with a minus sign. Remember if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item Balance Sheet Income Statement Stockholders Equity Assets Liabilities Revenues No Entry X X 2. How should the gain or loss on the sale of the asset be presented on the income statement? of the income statement to indicate that it part of the normal operating activity of the The gain or loss should appear in the company