Disposal of Fixed Asset

Equipment acquired on January 6 at a cost of $212,500 has an estimated useful life of 7 years and an estimated residual value of $27,700.

Question Content Area

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	$fill in the blank 512224066fc705a_1
Year 2	$fill in the blank 512224066fc705a_2
Year 3	$fill in the blank 512224066fc705a_3

b. What was the book value of the equipment on January 1 of Year 4? $fill in the blank 512224066fc705a_4

Question Content Area

c. Assuming that the equipment was sold on January 3 of Year 4 for $126,600, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.

Jan. 3	Accounts PayableCashDepreciation Expense-EquipmentEquipmentGain on Sale of Equipment	- Select -	- Select -
	Accounts ReceivableAccumulated Depreciation-EquipmentDepreciation Expense-EquipmentEquipmentGain on Sale of Equipment	- Select -	- Select -
	Accounts PayableDepreciation Expense-EquipmentEquipmentGain on Sale of EquipmentLoss on Sale of Equipment	- Select -	- Select -
	Accumulated Depreciation-EquipmentCashEquipmentGain on Sale of EquipmentLoss on Sale of Equipment	- Select -	- Select -

Question Content Area

d. Assuming that the equipment had been sold on January 3 of Year 4 for $136,000 instead of $126,600, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.

Jan. 3	CashDepreciation Expense-EquipmentEquipmentGain on Sale of EquipmentLoss on Sale of Equipment	- Select -	- Select -
	Accounts PayableAccumulated Depreciation-EquipmentDepreciation Expense-EquipmentEquipmentLoss on Sale of Equipment	- Select -	- Select -
	Accumulated Depreciation-EquipmentCashDepreciation Expense-EquipmentEquipmentLoss on Sale of Equipment	- Select -	- Select -
	Accumulated Depreciation-EquipmentCashDepreciation Expense-EquipmentGain on Sale of EquipmentLoss on Sale of Equipment	- Select -	- Select -