The company founder hires us as consultants and asks that we oversee the accounting for new equipment purchased on January 1, The founder wants to know the implications of different depreciation methods and estimates for the company's financial statements. Those statements will be used to attract financing from new investors and creditors. At the end of the equipment's first year in operation, we are given the following Tableau Dashboard Estimated Useful Life of Assets Purchase Price & Estimated Salvage Value Building Equipment Truck $70,000 20 16 $60,000 15 years $50,000 $70,000 $40,000 Years $30,000 6 years 4 years $20,000 $30,000 $40,000 $10,000 $30,000 $5,000 $10,000 $0 0 Building Purchase Salvage Purchase Salvage Purchase Salvage Price Value Price Value Price Value Equipment Truck Actual & Estimated Units-of-Production Year 1 Production Actual 35,000 units Year 2 Production Estimated 55,000 units Year 3 Production 25,000 units Estimated Year 4 Production 5,000 units Estimated 25,000 100,000 125,000 50,000 75,000 Total Units to be produced Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2 Assume the company uses straight-line depreciation for the equipment. At the beginning of the second year, we determine that the equipment has only two more years of remaining useful life. Compute the equipment's book value at the end of its first year. Book Value at the End of Year 1: Cost $ 40,000 Accumulated depreciation of first year 7.500 Book value at point of revision $ 32,500 1 Required 18 > Required 1A Required 1B Required 2 Assume the company uses straight-line depreciation for the equipment. At the beginning of the second year, we determine that the equipment has only two more years of remaining useful life. Compute depreciation for the second year given the revised useful life estimate. Revised Depreciation for Second Year Book value at point of revision 32,500 Revised salvage value Remaining depreciable cost Years of life remaining 2 Revised annual depreciation for second year Required 1A Required 1B Required 2 At the end of the equipment's useful life, the company plans to sell it. Record the sale of equipment at the end of its useful life for (a) $12,000 cash and (b) $6,000 cash. View transaction list View journal entry worksheet No Transaction General Journal Debit Credit 1 Cash 12,000 30,000 Accumulated depreciation Equipment Gain on sale of equipment 40,000 2,000 2 (b) Cash Accumulated depreciation Loss on sale of equipment Equipment 6,000 30,000 4,000 40,000