Your company purchased equipment for $30,000 on November 1, 2021. The equipment had an estimated life of 8 years, and an estimated salvage of $2,000. 

1. Calculate depreciation expense to be reported on the income statement for December 31, 2021, 2022, and 2023 using: 

a. The straight-line method 

b. The sum of the year's digits method 

c. 150% declining balance method. 

2. Assuming your company was using the straight-line method of depreciation, show all entries needed on April 1, 2024, if you sold the equipment unexpectedly for $22,000 in cash. 

3. Assuming your company was using the straight-line method of depreciation, show all entries necessary on December 31, 2024, if the equipment had been damaged and the future cash flows for the equipment at that time were estimated to be $12,000 and the fair value of the equipment was estimated to be $9,400. 

4. Based on your answer in part 3, show all entries you would make on December 31, 2025 if the future cash flows were estimated to be $9,200 and the fair value was estimated to be $8,800?

Answer rating: 100% (QA)

cast of equipment 30000 Estimated salvage value 2000 Useful life 8 years Depricable amount Bo... View the full answer