Problem 8-32A (Algo) Recording continuing expenditures for plant assets LO 8-2, 8-8 Morris Incorporated recorded the following transactions over the life of a piece of equipment purchased in Year 1: January 1, Year 1 purchased equipment for $109,000 cash. The equipment was estimated to have a five-year life and December 31, Year 1 Recorded depreciation and was to be depreciated using the straight-line method. Dear 1 . September 30, Year 2 Undertook routine repairs costing $900. December 31, Year 2 Recorded depreciation expense for Year 2 . January 1, Year 3 Made an adjustment costing $4,500 to the equipment. It improved the quality of the output but did Demot affect the life and salvage value estimates. December 31, Year 3 Recorded depreciation expense for Year 3 . June 1, Year 4 Incured $2,750 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 $12,800. The overhaul was estimated 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 $38,000 for the equipment. Required a. Use a horizontal statements model to show the effects of these transactions on the elements of the financial statements. Use + for increase, - for decrease, +/ - for both increase and decrease, and leave blank for not affected. The first event is recorded as an example. b. Determine the amount of depreciation expense to be reported on the income statements for Year 1 through Year 6. c. Determine the book value (cost - accumulated depreciation) Morris will report on the balance sheets at the end of each year for Year 1 through Year 6. d. Determine the amount of the gain or loss Morris will report on the disposal of the equipment on October 1 , Year 6. e. Prepare the journal entry for the disposal of the equipment on October 1, Year 6 . Use a horizontal statements model to show the effects of these transactions on the elements of the financial statements. Use + for increase, for decrease, +/ - for both increase and decrease, and leave blank for not affected. The first event is recorded as an example. (In the Statement of Cash Flows column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity and leave blank to indicate the element is not affected by the event.) Determine the amount of depreciation expense to be reported on the income statements for Year 1 through Year 6 . (Round your answers to the nearest dollar amount.) Determine the book value (cost - accumulated depreciation) Morris will report on the balance sheets at the end of each year for Year 1 through Year 6. (Round your answers to the nearest dollar amount.) Determine the amount of the gain or loss Morris will report on the disposal of the equipment on October 1 , Year 6. (Round intermediate calculations and final answer to nearest dollar amount.) Journal entry worksheet Record entry for disposal of the equipment on October 1, Year 6. Note: Enter debits before credits