Depreciation by Two Methods; Sale of Fixed Asset New tire retreading equipment, acquired at a cost of $140,000 at the beginning of a fiscal year, has an estimated useful life of four years and an estimated residual value 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 the straight-line method. Straight-Line Method Year Depreciation Expense 32,500 | 32,500 32,500 32,500 Accumulated Depreciation, End of Year Book Value, End of Year 32,500 65,000 97,500 V 107,500 75,000 42,500 10,000 4 130,000 Double-Declining-Balance Method Year Depreciation Expense Accumulated Depreciation, End of Year Book Value, End of Year 32,500X 37,500X 18,750X 8,750 X 65,000X 65,000X 2 4 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 Cash Assets Liabilities + Sto = Flows Cash + EquipmentAccumulated depreciation - equipmentNo effect Re 23,300 -140,000 116,700 X 0 4,550 Statement of Cash Flows Gain on 3. Illustrate 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 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 Flows Statement of Cash Flows Income Sta