A machine with a useful life of 6 years and a residual value of $3,000 was purchased at the beginning of year 1 for $30,000. The machine was sold for $15000 on April 1 in year 4.
(a). What was the book value of the equipment at the end of year 3 assuming the straight-line method of depreciation is used?
(b). Illustrate the effects on the accounts and financial statements of the depreciation from January 1 to April 1 of year 4.
(c). Illustrate the effects on the accounts and financial statements of the sale of the machine on April 1.