(A) On March 10, 2019, Lost World Company sells equipment that it purchased for $192,000 on August 20, 2012. It was originally estimated that the equipment would have a life of 12 years and a salvage value of $16,800 at the end of that time, and depreciation has been computed on that basis. The company uses the straight-line method of depreciation.

****** What is the journal entry for disposal?

(B) Greg Maddox Company constructed a building at a cost of $2,200,000 and occupied it beginning in January 1998. It was estimated at that time that its life would be 40 years, with no salvage value.

In January 2018, a new roof was installed at a cost of $300,000, and it was estimated then that the building would have a useful life of 25 years from that date. The cost of the old roof was $160,000.

*****

1. What amount of depreciation should have been charged annually from the years 1998 to 2017? (Assume straight-line depreciation.)

2. What entry should be made in 2018 to record the replacement of the roof?

3. Prepare the entry in January 2018 to record the revision in the estimated life of the building, if necessary.

4. What amount of depreciation should be charged for the year 2018?