Question - Equipment acquired on January 3, 2005, at a cost of $147,500, has an estimated useful life of eight years and an estimated residual value of $17,500.
a. What was the annual amount of depreciation for the years 2005, 2006, and 2007, using the straight-line method of depreciation?
Year Depreciation expense
2005 $
2006 $
2007 $
b. What was the book value of the equipment on January 1, 2008?
c. Assuming that the equipment was sold on January 2, 2008, for $95,000, journalize the entry to record the sale.
d. Assuming that the equipment had been sold on Jan 2, 2008, for $100,000 instead of $95,000, journalize the entry to record the sale.