Equipment was acquired at the beginning of the year at a cost of $537,500. The equipment was depreciated using the double-declining-balance method based on an estimated useful life of 9 years and an estimated residual value of $47,040. A. What was the depreciation for the first year? Round your intermediate calculations to 4 decimal places. Round the depreciation for the year to the nearest whole dollar. B. Assuming that the equipment was sold at the end of the second year for $532,597, determine the gain or loss on the sale of the equipment. C. Journalize the entry on Dec. 31 to record the sale. Refer to the Chart of Accounts for the exact wording of account titles. C. Journalize the entry on Dec. 31 to record the sale. Refer to the Chart of Accounts for the exact wording of account titles. How does grading work? PAGE 1   JOURNAL ACCOUNTING EQUATION Score: 45/49     DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 ✔ ✔   ✔         2   ✔             3   ✔     ✔       4   ✔

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Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.