Disposal of Fixed Asset

Equipment acquired on January 8, 20Y1, at a cost of $280,000, has an estimated useful life of 8 years and an estimated residual value of $30,000.

a. What was the annual amount of depreciation for the years 20Y1, 20Y2, and 20Y3, using the straight-line method of depreciation?

	Depreciation expense
20Y1	$_______________
20Y2	$_______________
20Y3	$_______________

b. What was the book value of the equipment on January 1, 20Y4? $_______________

For decreases in accounts or outflows of cash, enter your answers as negative numbers. If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank.

c. Assuming that the equipment was sold on January 7, 20Y4, for $185,000, illustrate the effects on the accounts and financial statements of the sale.

Balance Sheet Statement of Cash Income Liabilities Stockholders' Equity Assets Flows Statement Jan. 7 Statement of Cash Flows Income Statement d. Assuming that the equipment was sold on January 7, 20Y4, for $192,400 instead of $185,000, illustrate the effects on the accounts and financial statements of the sale. Balance Sheet Statement of Cash Income Assets Liabilities + Stockholders' Equity Flows Statement Jan. 7. Statement of Cash Flows Income Statement