Assume that TarMart purchased equipment at the beginning of fiscal year 2016 for $480,000 cash. The equipment had an estimated useful life of 8 years and a residual value of $30,000.

1. What would depreciation expense be for year 3 under the straight-line method?

2. What would depreciation expense be for year 3 under the double-declining balance method?

3. What is the first year in which depreciation expense under the straight-line method is higher than under the declining balance method?

4. Assume TarMart uses the straight-line depreciation method for its equipment. Also assume that at fiscal year-end 2020, TarMart sold the equipment purchased at the beginning of fiscal year 2016 for $200,000 cash. Prepare the journal entry to record the sale of the equipment at year-end 2020.