Disposal of Fixed Asset

Equipment acquired on January 6 at a cost of $422,300, has an estimated useful life of 9 years and an estimated residual value of $55,100.

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 $284,900, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.

d. Assuming that the equipment had been sold on January 3 of Year 4 for $305,900 instead of $284,900, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.