LT assets - Financial Accounting

On July 1, 2020 (not June 1, 2020), Norman Company purchased for $660,000 snow-making equipment having an estimated useful life of 6 years with an estimated salvage value of $30,000. Depreciation is taken for the portion of the year the asset is used. The company has a December 31 year-end. As needed, round all computations to the nearest dollar amount.

1) Compute the depreciation expense under the following methods for 2020 and 2021. Show all computations clearly, please.

a) S-Y-D method:

2020 amount:

2021 amount:

b) DDB method:

2020 amount:

2021 amount:

2) Assume the company used the straight-line method (info for straight-line method is not given, expected to be calculated as a new problem), and SOLD the equipment at the end of 2022 (12-31-2022). [Hint: Recall the equipment was purchased on 7-1-2020]

a) Compute the book value at 12-31-22:

b) Compute the gain or loss on the sale assuming the sales price was $400,000.

c. Record the journal entry for this sale: