Custom Flags purchased a sewing machine in January 2017 for $8,000. Custom depreciated the machine using the straight linemethod with an estimated useful life of 9 years and a residual value of $800.

a) Calculate depreciation using the straight line method for 2017, 2018, and 2019.

b) Determine book value for the sewing machine as of December 31, 2019.

c) Record the journal entry for the sale of the sewing machine on April 1, 2020 for $5,800.

d) Record the journal entry for the sale of the sewing machine on April 1, 2020 for $5,200.

Problem 2

Red Brick Company purchased a front-end loader and tractor for $42,000 on April 1, 2014. The tractor has an estimated useful life of six years or 25,800 hours and a residual value of $2,000. Listed in the chart below is the number of hours the tractor and front-end loader were used during 2014 through 2020.

Year# of hours used

20143,990

20154,270

20163,990

20174,150

20184,245

20194,075

20201,080

a) Calculate depreciation using the straight-line method for 2014through 2020.

b) Calculate depreciation using units of production method for 2014 through 2020.

c) Calculate depreciation using declining balance method for 2014 through 2020.