Morris Incorporated recorded the following transactions over the life of a plece of equipment purchased in Year 1 : January 1, Year 1 Purchased equipment for $14,400 cash. The equipment was estimated to have a fiveyear life and $6,940 salvage value and was to be depreciated using the straight-line method. December 31, Year 1 Recorded depreciation expense for Year 1. September 30, Year 2 Undertook routine repairs costing $797. December 31, Year 2 Recorded depreciation expense for Year 2. January 1, Year 3 Made an adjustment costing $2,690 to the equipment. It improved the quality of the output but did not affect the life and salvage value estinates. December 31, Year 3 Recorded depreciation expense for Year 3. June 1, Year 4 Incurred $337 cost to oil and clean the equipment. December 31, Year 4 Recorded depreciation expense for Year 4. January 1, Year 5 Had the equipment completely overhauled at a cost of $7,030. The overhaul was estinated to extend the total life to seven years. The salvage value did not change. December 31, Year 5 Recorded depreciation expense for Year 5. october 1, Year 6 Received and accepted an offer of $16,000 for the equipment. Required a. Use a horizontal statements model to show the effects of these transactions on the elements of the financlal statements. The firs event is recorded as an example. b. Determine the amount of depreciation expense to be reported on the income statements for Years 1 through 5. c. Determine the book value (cost - accumulated depreciation) Morris will report on the balance sheets at the end of Year 1 through Year 5 . d. Determine the amount of the gain or loss Morris will report on the disposal of the equipment on October 1, Year 6