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A firm buys a fixed asset for $10,000. The firm estimates that the asset will...

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Accounting

A firm buys a fixed asset for $10,000. The firm estimates that the asset will be used for 5 years. After exactly 2 years however, the asset is suddenly sold for $5,000. The firm always provides a full years depreciation in the year of purchase and no depreciation in the year of disposal. Required: (a) Write up the relevant accounts (including disposal account but not Profit & Loss account) for each of the years 1, 2 and 3. Using the straight line and reducing balance methods.

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