Old World Deli is in the process of closing its operations. It sold its three-year-old restaurant equipment to El Tapitio for $80,000. The equipment originally cost $220,000 and had an estimated service life of 5 years and an estimated residual value of $20,000. Old World Deli uses straight-line depreciation for all equipment.

Required:

1. Calculate the balance in the accumulated depreciation account at the end of the third year.

2. Calculate the book value of the equipment at the end of the third year.

3. What is the gain or loss on the sale of the equipment at the end of the third year?

4. Record the sale of the equipment at the end of the third year.