Sabel Co. purchased assembly equipment for $836,000 on January 1, 2018. Sabels financial condition immediately prior to the purchase is shown in the following horizontal statements model.

The equipment is expected to have a useful life of 380,000 miles and a salvage value of $38,000. Actual mileage was as follows:

2018	74,000
2019	79,000
2020	60,000
2021	54,000
2022	28,000

Required

1. Compute the depreciation for each of the five years, assuming the use of units-of-production depreciation.
2. Assume that Sabel earns $248,000 of cash revenue during 2018. Record the purchase of the equipment and the recognition of the revenue and the depreciation expense for the first year in a financial statements model like the preceding one. The first event is recorded as an example.
3. Assume that Sabel sold the equipment at the end of the fifth year for $40,400. Calculate the amount of gain or loss on the sale.

Answer:

A-

Years	Depreciation
2018
2019
2020
2021
2022

B.

C.

Assume that Sabel sold the equipment at the end of the fifth year for $40,400. Calculate the amount of gain or loss on the sale.