5.

Equipment acquired on January 8 at a cost of $146,290 has an estimated useful life of 17 years, has an estimated residual value of $7,400, and is depreciated by the straight-line method.

a. What was the book value of the equipment at December 31 the end of the fourth year? $fill in the blank 502a5604bffdf82_1

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b. Assume that the equipment was sold on April 1 of the fifth year for $105,267.

1. Journalize the entry to record depreciation for the three months until the sale date. If an amount box does not require an entry, leave it blank. Round your answers to the nearest whole dollar if required.

	Depreciation Expense-Equipment	fill in the blank 37d8cd060fa9ff3_2	fill in the blank 37d8cd060fa9ff3_3
	Accumulated Depreciation-Equipment	fill in the blank 37d8cd060fa9ff3_5	fill in the blank 37d8cd060fa9ff3_6

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2. Journalize the entry to record the sale of the equipment. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations.

	Cash	fill in the blank a7c04302400006b_2	fill in the blank a7c04302400006b_3
	Accumulated Depreciation-Equipment	fill in the blank a7c04302400006b_5	fill in the blank a7c04302400006b_6
	Loss on Sale of Equipment	fill in the blank a7c04302400006b_8	fill in the blank a7c04302400006b_9
	Equipment	fill in the blank a7c04302400006b_11	fill in the blank a7c04302400006b_12

6.

Disposal of Fixed Asset

Equipment acquired on January 6 at a cost of $144,900 has an estimated useful life of 7 years and an estimated residual value of $18,900.

a. What was the annual amount of depreciation for Years 1-3 using the straight-line method of depreciation?

Year	Depreciation Expense
Year 1	$fill in the blank 8af63d05c072fff_1
Year 2	$fill in the blank 8af63d05c072fff_2
Year 3	$fill in the blank 8af63d05c072fff_3

b. What was the book value of the equipment on January 1 of Year 4? $fill in the blank 8af63d05c072fff_4

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Asset cost minus residual value equals depreciable cost.

Asset cost minus accumulated depreciation equals book value. The Accumulated Depreciation account is a permanent account and therefore the balance in the account grows each year of the asset's life.

c. Assuming that the equipment was sold on January 3 of Year 4 for $86,400, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.

	Cash	fill in the blank 9cbf4f005fa5faa_2	fill in the blank 9cbf4f005fa5faa_3
	Accumulated Depreciation-Equipment	fill in the blank 9cbf4f005fa5faa_5	fill in the blank 9cbf4f005fa5faa_6
	Loss on Sale of Equipment	fill in the blank 9cbf4f005fa5faa_8	fill in the blank 9cbf4f005fa5faa_9
	Equipment	fill in the blank 9cbf4f005fa5faa_11	fill in the blank 9cbf4f005fa5faa_12