Problem 7 (20 Points) Please show your work & Answer both parts of the question!

(a) Brown Company purchased equipment in 2008 for $160,000 and estimated a $10,000 salvage value at the end of the equipment's 10-year useful life. At December 31, 2014, there was $105,000 in the Accumulated Depreciation account for this equipment using the straight-line method of depreciation. On March 31, 2015, the equipment was sold for $42,000.

Indicate the accounts that are increased and/or decreased and by which amount to remove the equipment from the books of Brown Company on March 31, 2015.

(b) Finney Company sold a machine for $12,000. The machine originally cost $34,000 in 2018 and $8,000 was spent on a major overhaul in 2021 (charged to the Equipment account). Accumulated Depreciation on the machine to the date of disposal was $30,000.

Indicate which accounts are increased and /or decreased and by which amount to record the disposition of the machine.