Larsen Company purchased factory equipment with an invoice price of $50,000. Other costs incurred were freight costs, $1,300; installation wiring and foundation, $2,200; material and labor costs in testing equipment, $700; oil lubricants and supplies to be used with equipment, $500; fire insurance policy covering equipment, $1,400. The equipment is estimated to have a $5,000 salvage value at the end of its 8-year useful service life.

Instructions:

(a) Compute the acquisition cost of the equipment.

Acquisition cost of the equipment .=

(b) If the straight-line method of depreciation was used, compute the annual depreciation expense.

Annual depreciation expense .=

(c) The equipment was disposed at end of 3 years. Record gain or loss (N/A if no gain no loss).=

(1) It was scrapped as having no value.

Gain or Loss =

How much =

(2) It was sold for $30,000.

Gain or Loss =

How much =

(3) It was sold for $40,000.

Gain or Loss =

How much =

Please put answers next to each equation sign