E7-14. Disposal of Fixed Asset Obj. 3 Equipment acquired on January 3, 20Y1, at a cost of $140,000, has an estimated useful life of 5 years and an estimated residual value of $15,000 a. What was the annual amount of depreciation for the years 20Y1, 20Y2, and 20Y3, using the straight-line method of depreciation? ANSWER b. What was the book value of the equipment on January 1, 20Y4? c. Assuming that the equipment was sold on January 2, 20Y4, for $63,500, illustrate the effects on the accounts and financial statements of the sale. d. Assuming that the equipment was sold on January 2, 20Y4, for $71,000 instead of $63,500, illustrate the effects on the accounts and financial statements of the sale