Q#4-A ( 04 marks)

The Outpatient clinic of eastside Hospital acquired X ray equipment for 79,000 with an expected useful life of 5 year and a 4000 expected residual value Sum of year digits method was used. The equipment was sold at the end of the fourth year for 12,000 cash

Required

1. Compute the gain or loss on the sale.
2. Show the journal entries for the transaction in requirement #1
3. Repeat 2a assuming that the cash price was 7,000 instead of 12,000 ( use Straight line method )