1.Equipment was acquired on January 1, 2018, for $15,000 with an estimated 4-year life and $1,000 residual value. The company uses straight-line depreciation. Record the gain or loss if the equipment was sold on December 31, 2020, for $5,000. Multiple Choice Cash 5,000 Accumulated Depreciation 10,500 Equipment 15,000 Gain 500 Cash 5,000 Equipment 4,500 Gain 500 Cash 5,000 Equipment 3,500 Gain 1,500 Cash 5,000 Accumulated Depreciation 7,000 Loss 3,000 Equipment 15,000

2.

Archie Co. purchased a framing machine for $45,000 on January 1, 2018. The machine is expected to have a four-year life, with a residual value of $5,000 at the end of four years. Using the double-declining balance method, depreciation for 2018 and book value at December 31, 2018, would be:

Multiple Choice

$22,500 and $22,500.

$22,500 and $17,500.

$20,000 and $25,000.

$20,000 and $20,000.