A company has the following fixed asset data:

• Cost: $500,000
• Accumulated depreciation: $200,000
• Book value: $300,000
• Useful life: 10 years
• Residual value: $50,000

Requirements:

(a) Calculate the annual depreciation expense using the straight-line method. (b) Determine the book value at the end of year 5. (c) Prepare the journal entries for the disposal of the asset at the end of year 5 for $250,000. (d) Discuss the impact of the disposal on financial statements.