Anderson, Incorporated, has several pieces of highly specialized equipment. Management has determined that one piece of high$-$tech equipment needs to be replaced, even though it is still in good working condition. Advances in technology have rendered that piece of equipment obsolete when compared with newly developed equipment that is more efficient. Facts related to this piece of equipment are as follows:  

 

$1.$ Original cost of the equipment was $$318,000.$

$2.$ Estimates at the time the equipment was originally purchased had a useful life of eight years with a residual value of $$84,000.$

$3.$ Double$-$declining$-$balance depreciation $($twice the straight$-$line rate$)$ has been recorded for two years up to the time management replaces the equipment.

$4.$ The equipment was sold for $$134,000$ to a company that does not require the latest technology.

Equipment cost $$318,000$

Equipment sold $($scenario $1)$ $$134,000$

Equipment sold $($scenario $2)$ $$184,000$

Required:

Note: Use the cells A$2$ to B$11$ from the above information to complete this question.

a$.$ Determine the following:

Depreciation expense for Year $1$

Book Value After $1$ Year

Depreciation expense for Year $2$

Book Value After $2$ Years

b$.$ Did the sale result in a gain or loss, and, if so$,$ how much?

c$.$ If the equipment had been sold for $$184,000$ instead of $$134,000,$ how would this change your answer in the previous requirement?

Students: The scratchpad area is for you to do any additional work you need to solve this question or can be used to show your work.

Nothing in this area will be graded, but it will be submitted with your assignment.