Depreciation by Two Methods; Sale of Fixed Asset

New tire retreading equipment, acquired at a cost of $$110,000$ on September $1$ of Year $1($beginning of the fiscal year$),$ has an estimated useful life of four years and an estimated residual value of $$7,500.$ 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.

On September $6$ of Year $4,$ the equipment was sold for $$18,000.$

Required:

Question Content Area

$1.$ 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 $($a$)$ the straight$-$line method and $($b$)$ the double$-$declining$-$balance method.

a$.$ Straight$-$line method

Year Depreciation

Expense Accumulated Depreciation,

End of Year Book Value,

End of Year

b$.$ Double$-$declining$-$balance method

Year Depreciation

Expense Accumulated Depreciation,

End of Year Book Value,

End of Year

Question Content Area

$2.$ Journalize the entry to record the sale, assuming double$-$declining balance method is used. If an amount box does not require an entry, leave it blank.

Question Content Area

$3.$ Journalize the entry to record the sale in $(2),$ assuming that the equipment sold for $$10,500$ instead of $$18,000.$ If an amount box does not require an entry, leave it blank.