Sale of Asset

Equipment acquired on January 3, 20Y3, at a cost of $415,000, has an estimated useful life of 15 years, has an estimated residual value of $32,500, and is depreciated by the straight-line method.

a. What was the book value of the equipment at December 31, 20Y6, the end of the year? $

For decreases in accounts or outflows of cash, enter your answers as negative numbers. If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank.

b1. Assuming that the equipment was sold on July 1, 20Y7, for $285,000, illustrate the effects on the accounts and financial statement of depreciation for the six months until the sale date.

Statement of Cash Flows	Balance Sheet									Income Statement
	Assets				=	Liabilities	+	Stockholders' Equity
	-	SelectAccumulated Depreciation - EquipmentCashNo effectItem 2	+	SelectAccounts ReceivableEquipmentNo effectItem 3	=	SelectAccounts PayableAccumulated Depreciation - EquipmentNo effectItem 4	+		SelectCapital StockRetained EarningsNo effectItem 5
July 1.										July 1.
Statement of Cash Flows									Income Statement
SelectFinancingInvestingOperatingNo effectItem 10									SelectDepreciation expenseLoss on disposal of fixed assetsSalesNo effectItem 12

b2. Assuming that the equipment was sold on July 1, 20Y7, for $285,000, illustrate the effects on the accounts and financial statement of the sale of the equipment.

Statement of Cash Flows	Balance Sheet									Income Statement
	Assets					=	Liabilities	+	Stockholders' Equity
	SelectAccounts ReceivableCashNo effectItem 14	+	SelectEquipmentSuppliesNo effectItem 15	-	SelectAccumulated Depreciation - EquipmentDepreciation ExpenseNo effectItem 16	=	SelectAccounts PayableAccumulated Depreciation - EquipmentNo effectItem 17		SelectCapital StockRetained EarningsNo effectItem 18
July 1.										July 1.
Statement of Cash Flows									Income Statement
SelectFinancingInvestingOperatingNo effectItem 24