Determine depreciation method used and date of asset acquisition; record disposal of asset The balance sheets of Tully Corp. showed the following at December 31, 2014, and 2013:
Machine, less accumulated depreciation of $80,000 at December 31, 2014, and December 31, 2014 December 31, 2013 $50,000 at December 31, 2013. $60,000 $90,000
Required:
a. If there have not been any purchases, sales, or other transactions affecting this machine account since the machine was first acquired, what is the amount of depreciation expense for 2014?
b. Assume the same facts as in part a, and assume that the estimated useful life of the machine is four years and the estimated salvage value is $20,000. Determine
1. What the original cost of the machine was.
2. What depreciation method is apparently being used. Explain your answer.
3. When the machine was acquired.
c. Assume that the machine is sold on December 31, 2014, for $47,200. Use the hori- zontal model (or write the journal entry) to show the effect of the sale of the machine.