Question

Equipment acquired on January 8, 20Y1, at a cost of $375,000, has an estimated useful life of 12 years and an estimated residual value of $45,000.
a. What was the annual amount of depreciation for the years 20Y1, 20Y2, and 20Y3, using the straight-line method of depreciation?
b. What was the book value of the equipment on January 1, 20Y4?
c. Assuming that the equipment was sold on January 7, 20Y4, for $280,000, illustrate the effects on the accounts and financial statements of the sale.
d. Assuming that the equipment was sold on January 7, 20Y4, for $300,000 instead of $280,000, illustrate the effects on the accounts and financial statements of the sale.



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  • CreatedMarch 11, 2014
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