Problem 11 Use the following information for questions a-d. Answer each question independently. Myers Inc. purchases a piece of equipment. At the date of purchase, the equipment had the following characteristics: Cost 800,000 Estimated useful life 8 Estimated salvage value 20,000 Productive life in hours 10,500

a) Assume the equipment was purchased on January 1, 2014 and the firm used double declining balance for depreciation. How much depreciation expense is recognized during 2015? b) Assume the equipment was purchased on July 1, 2014 and the firm used the straight line method of depreciation. How much depreciation expense is recognized during 2014 assuming a 12/31/14 fiscal year end?

c) Assume the equipment was purchased in 2014 and the firm used the activity based method of depreciation. During 2014, Myers used the machine for 2,000 hours. How much depreciation expense is recognized during 2014?

d) Assume the firm has used straight line depreciation since the asset was purchased on January 1, 2014. The asset was sold on 1/1/18 for $350,000. Determine the gain or loss recognized when the asset was sold.