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
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.