1.A machine cost $300,000, has annual depreciation expense of $60,000 and has accumulated depreciation of $150,000 on December 31, 2020. On January 1, 2021 when the machine has a fair value of $200,000. It is exchanged for a similar machine with a fair value of $190,000 and received $10,000. The exchange lacked commercial substance. show all entries that are necessary at January 1, 2021.

2.Equipment that cost $600,000 and has accumulated depreciation of $275,000 is exchanged with a fair value of $240,000 and $60,000 cash is received. The exchange lacked commercial substance. Prepare the entry for the exchange.

3.A machine cost $900,000 on October 1, 2020. It is estimated salvage value is $90,000 and its expected life is ten years. Calculate the depreciation expense (to the nearest dollar) by each of the following methods, showing the amounts used.

a.Straight-line for 2020

b.Double-declining balance for 2021 and 2021

c.Sum-of-the-years'-digits for 2020 & 2021