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Problem - Equipment was acquired at the beginning of the year at a cost of $91,000. The equipment was depreciated using the straight-line method based on an estimated useful life of nine years and an estimated residual value of $10,000.
Required -
a. What was the depreciation for the first year?
b. Assuming that the equipment was sold at the end of the second year for $78,000, determine the gain or loss on the sale of the equipment.
c. Journalize the entry to record the sale.
Flip uses the periodic method and had the following inventory events during January:
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