Reference no: EM13574414

New lithographic equipment, acquired at a cost of $718,750 at the beginning of a fiscal year, has an estimated useful life of five years and an estimated residual value of $61,800. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-declining-balance method was selected. In the first week of the fifth year, the equipment was sold for $105,300.

1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by the following methods: a. Straight-line method Year Depreciation Expense Accumulated Depreciation, End of Year Book Value, End of Year 1 $ $ $ 2 $ $ $ 3 $ $ $ 4 $ $ $ 5 $ $ $ b. Double-declining-balance method Year Depreciation Expense Accumulated Depreciation, End of Year Book Value, End of Year 1 $ $ $ 2 $ $ $ 3 $ $ $ 4 $ $ $ 5 $ $ $ 2. Journalize the entry to record the sale, assuming double-declining balance method is used. Debit Credit Cash Accumulated Depreciation Equipment Gain on Sale of Equipment 3. Journalize the entry to record the sale, assuming that the equipment was sold for $90,400 instead of $105,300. Debit Credit Cash Accumulated Depreciation Loss on Sale of Equipment Equipment.