Disposal of fixed asset

Equipment acquired on January 6 at a cost of $425,000 has an estimated useful life of 20 years and an estimated residual value of $35,000.

Question Content Area

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

Year one

Year two

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 $360,000, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.

d. Assuming that the equipment was sold on January 3 of Year 4 for $370,000 instead of $360,000, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.