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Sabel Co. purchased assembly equipment for $884,000 on January 1, 2016. Sabels financial condition immediately prior to the purchase is shown in the following horizontal statements model:

The equipment is expected to have a useful life of 340,000 machine hours and a salvage value of $34,000. Actual machine-hour use was as follows:

2016	70,000
2017	75,000
2018	56,000
2019	50,000
2020	24,000

Required:

a.	Compute the depreciation for each of the five years, assuming the use of units-of-production depreciation.

	Years Depreciation 2016 2017 2018 2019 2020

b.

Assume that Sabel earns $244,000 of cash revenue during 2016. Record the purchase of the equipment and the recognition of the revenue and the depreciation expense for the first year in a financial statements model like the preceding one. (In the Cash Flow column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event. Enter any decreases to account balances with a minus sign.)

	SOBEL CO. Horizontal Statements Model for 2016 Balance Sheet Income Statement Assets Stockholders Equity Revenue Expense = Net Income Cash Flow Event Cash + Book Value of Equipement = Common Stock + Retained Earnings = Balance 940,000 + = 940,000 + = NA Equipement + = + = Revenue + = + = Deperciation + = + = Balance 940,000 + 0 = 940,000 + 0 0 0 = 0 0

c.	Assume that Sabel sold the equipment at the end of the fifth year for $36,000. Record the general journal entry for the sale. (If no entry is required for a transaction/event, select "No journal entry

Journal Entry Worksheet

Record entry for sale of equipment at the end of fifth year.

	Event General Journal Debit Credit
	1

*Enter debits before credits

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