Part 1

Cullumber Company owns delivery equipment that cost $49,700 and has accumulated depreciation of $24,800 as of July 30, 2020.On that date, Cullumber disposes of this equipment.

1. What is the net book value of the equipment on July 30, 2020?
2. True or false: Regardless of the value received for the equipment on July 30, 2020, Cullumber must remove its net book value from the accounting records by creditingDelivery equipmentfor $49,700 and debitingAccumulated Depreciation - Delivery equipmentfor $24,800.Enter T or F.
3. Assume Cullumber scraps the equipment as having no value on July 30. What is the gain or loss, if any, that Cullumber should recognize?Enter D for debit or C for credit in the firstbox and the amount in the second box.
4. Assume Cullumber sells the equipment for $37,200 cash on July 30. What is the gain or loss, if any, that Cullumber should recognize?Enter D for debit or C for credit in thefirstbox and the amount in the second box.
5. Assume Cullumber sells the equipment for $18,000 cash on July 30. What is the gain or loss, if any, that Cullumber should recognize?Enter D for debit or C for credit in thefirstbox and the amount in the second box.

Part 2

Victor Mineli, the new controller of Carla Vista Co., has reviewed the expected useful lives and salvage values of selected depreciable asset categories at the beginning of 2017. Here are his findings:

CategoryDateHistoricalAccum.Useful Life (Years)SalvageValue

of AssetAcquiredCostDeprec.OriginalProposedOriginalProposed

Building1/1/2009$736,500$136,0004048$56,500$36,700

Warehouse1/1/2012145,00027,71025206,4504,400

All assets were placed into service on their acquisition dates and are depreciated by the straight-line method. Carla Vista Co. uses a calendar year in preparing annual financial statements. Note that "Proposed" useful life is a revised estimate oftotal life, not remaining life.Enter all answers in whole dollar amounts without a $.If rounding is necessary, round to the nearest whole dollar (e.g., xxx).

1. Using the original values, how muchannualdepreciation expense did Carla Vista recognize for theBuildingin 2016?
2. Assume that management has agreed to accept Victor's proposed useful life change for theBuilding, but decides to retain the original salvage value estimate.How much annual depreciation expense will Carla Vista recognize for the Building in 2017?
3. Now assume that management has agreed to accept Victor's proposed changes toboththe useful life and the salvage value of theBuilding.How much annual depreciation expense will Carla Vista recognize for the Building in 2017?
4. Using the original values, how muchannualdepreciation expense did Carla Vista recognize for theWarehousein 2016?
5. Assume that management has agreed to accept Victor's proposed useful life change for theWarehouse, but decides to retain the original salvage value estimate. How much annual depreciation expense will Carla Vista recognize for the Warehouse in 2017?
6. Now assume that management has agreed to accept Victor's proposed changes toboththe useful life and the salvage value of theWarehouse.How much annual depreciation expense will Carla Vista recognize for the Warehouse in 2017?