C- XYZ Company purchased an equipment on July 1, 2015 for $42,000. The equipment has an estimated useful life of five years and Barton expects to sell the equipment at the end of its life for $2,000.

Required:

1) Calculate the annual depreciation for the Equipment.

2) Prepare the adjusting entry at Dec 31, 2015

3) Show the effect of the adjusting entry on

a- The Income statement for year ended 2017

b- The Balance sheet on Dec 31, 2017 (6 Marks)