Equipment acquired on January 9, 20Y3, at a cost of $475,000, has an estimated useful life of 16 years, an estimated residual value of $85,500, and is depreciated by the straight-line method.

a. What was the book value of the equipment at the end of the fifth year, December 31, 20Y7? Round your interim calculations and final answer to the nearest dollar. $fill in the blank 1

For decreases in accounts or outflows of cash, enter your answers as negative numbers. Round annual depreciation to the nearest dollar and use this amount in your follow-on calculations. If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank.

b1. Assuming that the equipment was sold on July 1, 20Y8, for $213,750, illustrate the effects on the accounts and financial statement of depreciation for the six months until the sale date.

		Balance Sheet
		Assets				=	Liabilities	+	Stockholders' Equity
		-	Accounts receivableAccumulated depreciation - equipmentCashNo effectAccumulated depreciation - equipment	+	Accounts receivableCashEquipmentNo effectNo effect	=	Accounts payableAccumulated depreciation - equipmentCapital stockNo effectNo effect	+	Capital stockLoss on disposal of fixed AssetsRetained earningsNo effectRetained earnings
	July 1.		fill in the blank 6		fill in the blank 7		fill in the blank 8		fill in the blank 9
	Statement of Cash Flows						Income Statement
	FinancingInvestingOperatingNo effectNo effect		fill in the blank 11				Depreciation expenseLoss on disposal of fixed AssetsSalesNo effectDepreciation expense		fill in the blank 13

b2. Assuming that the equipment was sold on July 1, 20Y8, for $213,750, illustrate the effects on the accounts and financial statement of the sale of the equipment.

		Balance Sheet
		Assets					=	Liabilities	+	Stockholders' Equity
		Accounts receivableAccumulated depreciation - equipmentCashNo effectCash	+	Accounts payableEquipmentSuppliesNo effectEquipment	-	Accounts payableAccumulated depreciation - equipmentDepreciation expenseNo effectAccumulated depreciation - equipment	=	Accounts payableAccumulated depreciation - equipmentCapital stockNo effectNo effect	+	Capital stockRetained earningsSalesNo effectRetained earnings
	July 1.	fill in the blank 19		fill in the blank 20		fill in the blank 21		fill in the blank 22		fill in the blank 23
	Statement of Cash Flows							Income Statement
	FinancingInvestingOperatingNo effectInvesting	fill in the blank 25						Loss on disposal of fixed AssetsRetained earningsSalesNo effectLoss on disposal of fixed Assets		fill in the blank 27