Sale of Equipment

Equipment was acquired at the beginning of the year at a cost of $662,500. The equipment was depreciated using the straight-line method based on an estimated useful life of 9 years and an estimated residual value of $40,410.

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a. What was the depreciation for the first year? Round your answer to the nearest cent. $fill in the blank cc8d4e093fab037_1

b. Using the rounded amount from Part a in your computation, determine the gain or loss on the sale of the equipment, assuming it was sold at the end of year eight for $102,606. Round your answer to the nearest cent. Enter your answer as a positive amount. $fill in the blank cc8d4e093fab037_2

GainLossLoss

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Book value is the asset cost minus accumulated depreciation.

Compare the book value to the sale price. If the book value is more than the sale price, the equipment was sold for a loss. If the book value is less than the sale price, the equipment was sold for a gain.

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c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Round your answers to the nearest cent.

	Accounts PayableCashDepreciation ExpenseEquipmentGain on Sale of EquipmentCash	Cash	Cash
	Accounts PayableAccumulated Depreciation-EquipmentDepreciation ExpenseEquipmentGain on Sale of EquipmentAccumulated Depreciation-Equipment	Accumulated Depreciation-Equipment	Accumulated Depreciation-Equipment
	Accounts PayableAccumulated Depreciation-EquipmentDepreciation ExpenseGain on Sale of EquipmentLoss on Sale of EquipmentLoss on Sale of Equipment	Loss on Sale of Equipment	Loss on Sale of Equipment
	Accounts PayableAccumulated Depreciation-EquipmentDepreciation PayableEquipmentDepreciation ExpenseEquipment	Equipment	Equipment