Disposal of fixed asset

Equipment acquired on January $6$ at a cost of $$309,100$ has an estimated useful life of $8$ years and an estimated residual value of $$40,300.$

a$.$ What was the annual amount of depreciation for 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 $4?$

$

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Asset cost minus residual value equals depreciable cost.

Asset cost minus accumulated depreciation equals book value. The Accumulated Depreciation account is a permanent account and therefore the account grows each year of the asset's life.