Equipment was acquired at the beginning of the year at a cost of $75,720 The equipment was depreciated using the straight line method based on an estimated useful life of six years and an estimated residual value of $7,920 Required (a) What was the depreciation expense for the first year (b) Assuming the equipment was sold at the end of the second year for $57,370, determine the gain or loss on 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 ACCOUNTSGeneral Ledger ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 114 Interest Receivable 115 Notes Receivable 116 Merchandise Inventory 117 Supplies 119 Prepaid Insurance 120 Land 121 Equipment 122 Accumulated Depreciation 132 Goodwill 133 Patents LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Owner, Capital 311 Owner, Drawing 312 Income Summary REVENUE 410 Sales 610 Interest Revenue 620 Gain on Sale of Equipment EXPENSES 510 Cost of Merchandise Sold 520 Salaries Expense 521 Advertising Expense 522 Supplies Expense 523 Delivery Expense 524 Rent Expense 525 Insurance Expense 531 Repairs and Maintenance Expense 541 Depreciation Expense 543 Depletion Expense 544 Amortization Expense Patents 591 Miscellaneous Expense 710 Interest Expense 720 Loss on Sale of Equipment What was the depreciation expense for the first year Assuming the equipment was sold at the end of the second year for $57,370, determine the gain or loss on sale of the equipment

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Equipment was acquired at the beginning of the year at a cost of $75,720. The equipment was depreciated using the straight-line method based on an

Equipment was acquired at the beginning of the year at a cost of $75,720. The equipment was depreciated using the straight-line method based on an estimated useful life of six years and an estimated residual value of $7,920.

Required:

(a)

What was the depreciation expense for the first year?

(b)

Assuming the equipment was sold at the end of the second year for $57,370, determine the gain or loss on 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 ACCOUNTSGeneral Ledger

	ASSETS
110	Cash
111	Petty Cash
112	Accounts Receivable
114	Interest Receivable
115	Notes Receivable
116	Merchandise Inventory
117	Supplies
119	Prepaid Insurance
120	Land
121	Equipment
122	Accumulated Depreciation
132	Goodwill
133	Patents

	LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

	EQUITY
310	Owner, Capital
311	Owner, Drawing
312	Income Summary

	REVENUE
410	Sales
610	Interest Revenue
620	Gain on Sale of Equipment

	EXPENSES
510	Cost of Merchandise Sold
520	Salaries Expense
521	Advertising Expense
522	Supplies Expense
523	Delivery Expense
524	Rent Expense
525	Insurance Expense
531	Repairs and Maintenance Expense
541	Depreciation Expense
543	Depletion Expense
544	Amortization Expense-Patents
591	Miscellaneous Expense
710	Interest Expense
720	Loss on Sale of Equipment What was the depreciation expense for the first year? Assuming the equipment was sold at the end of the second year for $57,370, determine the gain or loss on sale of the equipment.