A Machine with a Useful Life of 6 Years and a Residual

question 41

Essay

A machine with a useful life of 6 years and a residual value of $3,000 was purchased at the beginning of year 1 for $30,000. The machine was sold for $15,000 on April 1 in year 4.
(a)What was the book value of the machine at the end of yea 3 assuming the straight-line method of depreciation is used?
(b) Illustrate the effects on the accounts and financial statements of the depreciation from Jamuary 1 to April 1 of year 4.
(c)Illustrate the effects on the accounts and financial statements of the sale of the machine on April 1.

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