Chapter 8 question 1 The Ramirez & Chao Corporation (RCC) purchased a van that cost $62,000, which had an estimated residual value of $8,000 and an estimate useful life of six years. RCC uses straight-line depreciation. What is the net book value of the car at the end of the second year? Show your work. Assume RCC made the following expenditures related to the van at the beginning of the fifth year. As a result of the new transmission ESC extended its estimate of the useful life of the van from a total of six years to a total of eight years and changed the estimate of the residual value to $4,000. Routine oil change $80 Replacement of the transmission $4,100 What amount would ESC record as depreciation expense at the end of the fifth year? Show your work. Chapter 8 question 2 Macie and Hira INC. purchased machinery for $60,000 to use in its operations. The machinery has a useful life of 5 years and a salvage/residual value of $2,000 at the end of its useful life. Assume the company sells the asset at the end of year three for $15,000. Prepare the journal entry for the sale assuming the company used the straight-line method of depreciation (show your work)