4. oseph Corp. purchased equipment costing $50,000. It is estimated to have a life of 5 years or 2,000 machine hours. The residual value is $10,000. The actual hours used by the equipment is:

Year 1 500 hours

Year 2 1,200 hours

Year 3 400 hours

Required:

1. What is the depreciation expense and book value for the first three years, using:
   1. Double declining balance
   2. Activity method

2. Assume Joseph Corp. sold the equipment at the end of Year 3 for $10,500. Prepare the necessary general journal entry, assuming that the activity method was used.