Decreto by Two Methods: Sale of Fixed Asset New tre retreading equipment, acred at a cost of $140,000 at the beginning of a fiscal year, has an estimated useful life of four years and an estimated residualue of $10,000. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-declining balance method was selected In the first week of the fourth year, the equipment was sold for 23,300 Instructions: 1a. Determine the annual depreciation expense for each of the estimated four years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by Straight-Line Method Accumulated Depreciation, End of Year Book Value, End of Year Year Depreciation Expense 2 4 Determine the annual depreciation expense for each of the estimated four years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by the double-declining balance method Double-Declining-Balance Method Year Depreciation Expense Accumulated Depreciation, End of Year Book Value, End of Year 1 2 3 4 2. Trustrate the effects on the accounts and financial statements of the sale. Assume the double-decining balance method of depreciation is used. If no account or activity is affected, select "No effect from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts. Balance Sheet Statement of Cash Assets Liabilities Stockholders' Equity Previous Check My Work Save and to All work saved 2. Illustrate the effects on the accounts and financial statements of the sale. Assume the double-declining balance method of depreciation is used. If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts. Balance Sheet Statement of Assets Liabilities Stockholders' Equity Cash Flows Cash + Equipment Accumulated depreciation equipment No effect Retained earnings Statement of Cash Flows Income Statement Investing Gain on disposal of equipment 3. Tlustrate the effects on the accounts and financial statements of the sale, assuming a sale price of $15,250 instead of $23,300. Also assume the double-declining balance method of depreciation is If no account or activity is affected, select "No effect from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts. Balance Sheet Assets = Liabilities Statement of Cash Flows Stockholders' Equity No effect Retained earnings Equipment - Accumulated depreciation equipment Income Statement Statement of Cash Flows Loss on disposal of equipment Investing
