Morris Company purchased machinery that originally cost $75,000 on July 1, 2018. Morris depreciates machinery on a straight-line basis over five years. Morris expects the machinery to have a salvage value of $10,000 at the end of the useful life. On July 1, 2022, Morris sells the machinery for $16,250 in cash.

1) Calculate the value of annual depreciation expense on the machinery.

2) Provide the book value of the machinery after two years of use.

3) Complete the FSET for the sale of the fixed asset. Enter positive values to increase account balances and gains. Enter negative values to decrease account balances and losses. (1.5 points per blank).

	Cash	Machinery	Accumulated Depreciation	Gain/(Loss)
Sale