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Question - Company purchased office equipment on January 1, Year1. Company uses the straight line method for depreciation.
The office equipment cost $40,000
Company estimated a $2,000 residual value and a 10-year life for the equipment.
1. What is depreciation expense on the office equipment in Year1?
2. What will be the balance in accumulated depreciation at the end of three full years of use?
3. Assume the equipment is sold after 3 full years of use, for proceeds of $20,000, what amount of gain or loss would be reported on the income statement?
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