Equipment acquired on January 9, 20Y3, at a cost of $441,000, has an estimated useful life of 16 years, an estimated residual value of $79,380, and is depreciated by the straight-line method.
a. What was the book value of the equipment at the end of the fifth year, December 31, 20Y7? Round your interim calculations and final answer to the nearest dollar.
Enter account decreases, cash outflows, and the income statement effects that decrease net income as negative amounts. However, for contra asset accounts, enter account increases as a
negative value. Round annual depreciation to the nearest dollar and use this amount in your follow-on calculations. If no account or activity is affected, select "No effect" from the dropdown
and leave the corresponding number entry box blank.
b1. Assuming that the equipment was sold on July 1, 20Y8, for $176,400, illustrate the effects on the accounts and financial statement of depreciation for the six months until the sale date.
Financial Statement Effects
Assets
July 1.
Statement of Cash Flows
Balance Sheet
Liabilities
Stockholders' Equity
Income Statement
b2. Assuming that the equipment was sold on July 1, 20Y8, for $176,400, illustrate the effects on the accounts and financial statement of the sale of the equipment.
Financial Statement Effects
Balance Sheet
Assets
Liabilities
Stockholders' Equity
July 1.
Statement of Cash Flows
Income Statement
