For each transaction below, determine the appropriate treatment on Spin Co.'s Year 5 income statement by selecting the appropriate responses in the pull-down menus. Transaction #1: Spin Co. purchased a specialized saw for $25,000 on March 1, Year 1. At the time of the purchase, the saw had a six-year estimated useful life and a $3,000 salvage value. Spin Co. depreciated it using the straight-line (SL) method. Spin Co. also uses the monthly convention to calculate the depreciation amounts for its asset acquisitions. The saw was sold on July 31, Year 5 for $7,000. Transaction #2: Spin Co. purchased a drill press for $10,000 on January 1, Year 4. At the time of the purchase, the drill press had a four-year estimated useful life and a $1,000 salvage value at the end of four years. Spin Co. depreciated it using the double-declining balance (DDB) method. Spin Co. also uses the monthly convention to calculate the depreciation amounts for its asset acquisitions. On December 31, Year 5, management of Spin Co. decided that it will dispose of the drill press in early Year 6 for $8,000 (based on a firm offer from a potential buyer). Therefore, depreciation of the drill press will be discontinued after December 31, Year 5 and the drill press will be reclassified on the balance sheet as "other assets". Income Statement Classification Amount Transaction #1 iii Transaction #2 Give feedback Ask an instructor