Disposal of Fixed Asset

Equipment acquired on January 6 at a cost of $299,500 has an estimated useful life of 7 years and an estimated residual value of $39,100.

a. What was the annual amount of depreciation for the Years 1-3 using the straight-line method of depreciation?

Year Depreciation Expense

Year 1 $

Year 2 $

Year 3 $

b. What was the book value of the equipment on January 1 of Year 4? $

c. Assuming that the equipment was sold on January 3 of Year 4 for $178,500, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.

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d. Assuming that the equipment had been sold on January 3 of Year 4 for $191,700 instead of $178,500, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.

Jan. 3 ______ ___ ___

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