New tire retreading equipment acquired at a cost of 110 000

New tire retreading equipment, acquired at a cost of $110,000 at the beginning of a fiscal year,
has an estimated useful life of four years and an estimated residual value of $7,500. 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 fourth year, the equipment was
sold for $18,000.Instructions1. Determine the annual depreciation expense for each of the
estimated four 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 (a) the straight-line method and (b) the
double declining-balance method. The following columnar headings are suggested for each
schedule:2. Journalize the entry to record the sale.3. Journalize the entry to record the sale,
assuming that the equipment sold for $10,500 instead of $18,000?View Solution: New tire
retreading equipment acquired at a cost of 110 000
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