Excersise - Disposal of fixed asset
Equipment acquired on January 8, 2009, at a cost of $375,000, has an estimated useful life of 12 years and an estimated residual value of $45,000.
a.) What was the annual amount of depreciation for the years 2009, 2010, and 2011, using straight-line method of depreciation?
b.) What was the book value of the equipment on January 1, 2012?
c.) Assuming that the equipment was sold on January 7, 2012, for $280,000, illustrate the effects on the accounts and financial statements of the sale.
d.) Assuming that the equipment was sold on January 7, 2012, for $300,000 instead of $280,000, illustrate the effects on the accounts and financial statements of the sale.