New tire retreading equipment, acquired at a cost of $656,250 on September 1 at the beginning of a fiscal year, has an estimated useful life of five years and an estimated residual value of $56,400. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-declining-balance method was selected.

In the first week of the fifth year, on September 6, the equipment was sold for $96,100.

Required:

1. Determine the annual depreciation expense for each of the estimated four years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by the following methods:

1. a. Straight-line method

   Year	Depreciation Expense	Accumulated Depreciation, End of Year	Book Value, End of Year
   1	$fill in the blank 463772012f8902f_1	$fill in the blank 463772012f8902f_2	$fill in the blank 463772012f8902f_3
   2	$fill in the blank 463772012f8902f_4	$fill in the blank 463772012f8902f_5	$fill in the blank 463772012f8902f_6
   3	$fill in the blank 463772012f8902f_7	$fill in the blank 463772012f8902f_8	$fill in the blank 463772012f8902f_9
   4	$fill in the blank 463772012f8902f_10	$fill in the blank 463772012f8902f_11	$fill in the blank 463772012f8902f_12
   5	$fill in the blank 463772012f8902f_13	$fill in the blank 463772012f8902f_14	$fill in the blank 463772012f8902f_15

   b. Double-declining-balance method

   Year	Depreciation Expense	Accumulated Depreciation, End of Year	Book Value, End of Year
   1	$fill in the blank 463772012f8902f_16	$fill in the blank 463772012f8902f_17	$fill in the blank 463772012f8902f_18
   2	$fill in the blank 463772012f8902f_19	$fill in the blank 463772012f8902f_20	$fill in the blank 463772012f8902f_21
   3	$fill in the blank 463772012f8902f_22	$fill in the blank 463772012f8902f_23	$fill in the blank 463772012f8902f_24
   4	$fill in the blank 463772012f8902f_25	$fill in the blank 463772012f8902f_26	$fill in the blank 463772012f8902f_27
   5	$fill in the blank 463772012f8902f_28	$fill in the blank 463772012f8902f_29	$fill in the blank 463772012f8902f_30

   2. Journalize the entry to record the sale, assuming double-declining-balance method is used. If an amount box does not require an entry, leave it blank.

   	CashDepreciation Expense-EquipmentEquipmentGain on Sale of EquipmentLoss on Sale of Equipment	- Select -	- Select -
   	Accumulated Depreciation-EquipmentDepreciation Expense-EquipmentEquipmentGain on Sale of EquipmentLoss on Sale of Equipment	- Select -	- Select -
   	Accumulated Depreciation-EquipmentCashDepreciation Expense-EquipmentEquipmentLoss on Sale of Equipment	- Select -	- Select -
   	Accumulated Depreciation-EquipmentBuildingsDepreciation Expense-EquipmentGain on Sale of EquipmentLoss on Sale of Equipment	- Select -	- Select -

   3. Journalize the entry to record the sale in (2), assuming that the equipment was sold for $82,500 instead of $96,100. If an amount box does not require an entry, leave it blank.

   	Accounts PayableCashDepreciation Expense-EquipmentEquipmentGain on Sale of Equipment	- Select -	- Select -
   	Accounts ReceivableAccumulated Depreciation-EquipmentDepreciation Expense-EquipmentEquipmentGain on Sale of Equipment	- Select -	- Select -
   	Gain on Sale of EquipmentAccounts PayableDepreciation Expense-EquipmentEquipmentLoss on Sale of Equipment	- Select -	- Select -
   	Accumulated Depreciation-EquipmentCashDepreciation Expense-EquipmentEquipmentGain on Sale of Equipment	- Select -	- Select -

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