Disposal of Fixed Asset

Equipment acquired on January 8, 20Y1, at a cost of $717,500, has an estimated useful life of 17 years and an estimated residual value of $71,750.

a. What was the annual amount of depreciation for the years 20Y1, 20Y2, and 20Y3, using the straight-line method of depreciation? Round annual depreciation to the nearest dollar and use this amount in your follow-on calculations.

Depreciation expense 20Y1 41,137 X 20Y2 20Y3 b. What was the book value of the equipment on January 1, 2014? $ 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, 2014, for $251,125, illustrate the effects on the accounts and financial statements of the sale. Balance Sheet Statement of Assets Liabilities + Stockholders' Equity ' Income Statement Cash Flows Cash + Equipment Accumulated depreciation - equipment No effect Retained earnings Jan. 7. 0 Statement of Cash Flows Income Statement Investing Loss on disposal of fixed assets d. Assuming that the equipment was sold on January 7, 2074, for $968,625 instead of $251,125, illustrate the effects on the accounts and financial statements of the sale. Balance Sheet Statement of Assets Liabilities + Stockholders' Equity Income Statement Cash Flows Cash + Equipment Accumulated depreciation - equipment = No effect Retained earnings Jan. 7. 0 Statement of Cash Flows Income Statement Investing Gain on disposal of fixed assets