Ch.7 ebook Calculator Disposal of Fixed Asset Equipment acquired on January 8, 2011, at a cost of $690,000, has an estimated useful life of 19 years and an estimated residual value of $69,000 a. What was the annual amount of depreciation for the years 2011, 2012, and 20Y3, using the straight-line method of depreciation? Round annual depreciation to the nearest dollar and use this amount in your follow-un calculations. Depreciation expense 2011 $32,684 20Y2 32,684 20Y3 #32,684 b. What was the book value of the equipment on January 1, 2014? $ 591,948 For decreases in accounts or outflows of cash, enter your answers as negative numbers. If no account or activity is affected, select "No elect from the dropdown and leave the corresponding number entry box blank. c. Assuming that the equipment was sold on January 7, 2014, for $207,000, illustrate the effects on the accounts and financial statements of the sale. Balance Sheet Income Statement of Cash Flows Assets = Liabilities + Stockholders' Equity Statement Cash + Equipment - Accumulated depreciation equipment = No effect Retained earnings Jan. 7. 207,000 Statement of Cash Flows Income Statement Investing d. Assuming that the equipment was sold on January 7, 2014, for $956,000 instead of $207,000, illustrate the effects on the accounts and financial statements of the sale. Balance Sheet Statement of Cash Flows Assets Liabilities + Stockholders' Equity Income Statement Cash + Equipment - Accumulated depreciation - equipment = No effect Retained earnings Jan. 7. Statement of Cash Flows Income Statement Chak My W a. Asset cost minus residual value equals depreciable cost. Divide depreciable cost by estimated useful life. b. Book value is the asset cost minus the accumulated depreciation. c. Compare the book value at the point of sale (cost minus accumulated depreciation) to the sale price. If the book value is less than the sale price, the asset was sold for a gain. If the book value is more than the sale price, the equipment was sold at a loss. d. Compare the book value at the point of sale (cost minus accumulated depreciation) to the sale price. If the book value is less than the sale price, the asset was sold for again. If the book value is more than the sale price, the equipment was sold at a loss