Equipment acquired on January 3, 2007, at a cost of $504,000, has an estimated useful life of

Question:

Equipment acquired on January 3, 2007, at a cost of $504,000, has an estimated useful life of 12 years, has an estimated residual value of $42,000, and is depreciated by the straight-line method.
a. What was the book value of the equipment at December 31, 2010, the end of the year?
b. Assuming that the equipment was sold on April 1, 2010, for $315,000, illustrate the effects on the accounts and of (1) depreciation for the three months until the sale date, and (2) the sale of the equipment.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...