3. On January 1, 2003, Romer Manufacturing Company purchased equipment for $95,000. Romer paid $2,000 to have the machine installed. The equipment is expected to have a 5-year useful life and a salvage value of $7,000.
(a.) Compute depreciation expense for 2003 and 2004 using straight line depreciation.
(b.) What is the book value at the beginning of 2005?
(c.) Assume the equipment was sold on Jan 1, 2005, for $65,000.
Compute the amount of gain or loss from the sale.
(d.) Prepare the journal entry to record the sale of the equipment.