Reference no: EM133307198

Part A

RS Corporation purchased equipment with an 8-year useful life on January 1, 2020, for $19,000. The equipment has been depreciated using the straight line method, with an estimated residual value of $3,000. It was sold for $9,500 on August 31, 2023. Depreciation Expense was last recorded on December 31, 2022.

A. Create the necessary journal entries to record the sale.

PART B

RS Corporation purchased computer equipment with a 5-year useful life on August 20, 2022, for $80,000. They will depreciate the equipment using the double declining balance method. RS rounds depreciation to the nearest month.

B. Provide the amount of depreciation expense for 2022 and 2023. No journal entries required.

PART C

Assume RS Corporation depreciates the computer equipment in PART B using the straight line method instead of the double declining meth. Will net income be higher or lower using the straight line method?