At the beginning of the year, a company purchases equipment for $200,000 with an estimated salvage value of $10,000 and an estimated useful life of 20-years. 5. Record the first year of depreciation assuming the company uses the straight-line method of depreciation: (4 points) a. Description/Account Debit Credit Illustrate how the above entry will affect the accounting equation: Assets Liabilities Owner's Equity %3D Assume the equipment was sold at the end of the 12th year for $80,000. Journalize the entry to record the sale: (8 points) b. Credit Description/Account Debit Illustrate how the above entry will affect the accounting equation: Assets Liabilities Owner's Equity Instead of selling the equipment, assume at the beginning of the 13th retrofits (improves) the equipment for new capabilities at the cost of $40,000. Journalize the entry for the improvement: (3 points) the company year, C. Description/Account Debit Credit Illustrate how the above entry will affect the accounting equation: Assets Liabilities Owner's Equity d. After the improvement in the previous question, the remaining useful life of the asset is estimated at 15-years with a salvage value of $12,000. Journalize the revised depreciation for the 13th year under the straight-line method: (6 points) Description/Account Credit Debit Illustrate how the above entry will affect the accounting equation: Assets Owner's Equity Liabilities
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