See Exhibit $9-6$ in your text

FACTS:

Assume that you are depreciating equipment under both the straight line method and the double declining method. The cost of the equipment is $$720,000$ and the equipment has a residual value of $$140,000$ and an estimated useful life of $5$ years.

Required:

Prepare in EXCEL a $5$ year depreciation schedule for the equipment under straight line and double declining balance depreciation.

Assuming straight line depreciation, if the equipment is sold for $$500,000$ at the end of the second year, what is the gain or loss? Prepare the journal entry to support your answer.