Item 2: Equipment with a cost of $400,000 has an estimated salvage value of $50,000 and an estimated life of 5 years. Compute the annual depreciation and then show what this asset looks like on a classified balance sheet at the end of the second year.

Item 3: Equipment that cost $90,000 and on which $85,000 of accumulated depreciation has been recorded was disposed of for $11,000 cash. Make the entry to record this transaction. Hint: Compute BV and then gain (loss).

Item 4: Entity B bought equipment for $240,000 on January 1, 2021. It estimated the useful life to be 3 years with no salvage value, and the straight-line method of depreciation was used. On January 1, 2022, Entity B decides that it will use the equipment for a total of 5 years. Compute the revised depreciation expense for 2022 and make the entry to record depreciation expense.