Equipment was acquired at the beginning of the year at a cost of $465,000. The equipment was depreciated using thestraight-line methodbased on an estimated useful life of 15 years and an estimatedresidual valueof $45,000.

Required:

A.What was thedepreciationfor the first year?

B.Assuming the equipment was sold at the end of the eighth year for $235,000, determine the gain or loss on the sale of the equipment.

C.Journalize the entry to record the sale. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

ASSETS LIABILITIES

110Cash 210Accounts Payable

111Petty Cash 211Salaries Payable

213Sales Tax Payable

112Accounts Receivable 214Interest Payable

114Interest Receivable 215Notes Payable

115Notes Receivable

116Merchandise Inventory

117Supplies REVENUE

119Prepaid Insurance 410Sales

120Land 610Interest Revenue

123Delivery Truck 620Gain on Sale of Delivery Truck

124Accumulated Depreciation-Delivery Truck 621Gain on Sale of Equipment

125Equipment

126Accumulated Depreciation-Equipment

130Mineral Rights

131Accumulated Depletion

132Goodwill

133Patents

EQUITY

310Owner, Capital

311Owner, Drawing

312Income Summary

EXPENSES

510Cost of Merchandise Sold

520Salaries Expense

521Advertising Expense

522Depreciation Expense-Delivery Truck

523Delivery Expense

524Repairs and Maintenance Expense

529Selling Expenses

531Rent Expense

532Depreciation Expense-Equipment

533Depletion Expense

534Amortization Expense-Patents

535Insurance Expense

536Supplies Expense

539Miscellaneous Expense

710Interest Expense

720Loss on Sale of Delivery Truck

721Loss on Sale of Equipment