accounting question 405303

Aug 29, 2021 | Uncategorized

Conover Company ordered a machine on January 1, 2009, at a purchase price of $20,900. On the date of delivery, January 2, 2009, the company paid $7,500 on the machine and signed a note payable for the balance. On January 3, 2009, it paid $390 for freight on the machine. On January 5, Conover paid installation costs relating to the machine amounting to $1,200. On December 31, 2009 (the end of the accounting period), Conover recorded depreciation on the machine using the straight line method with an estimated useful life of 12 years and an estimated residual value of $3,350.

Requirement 1:

Indicate the effects (accounts, amounts, and + , ‘ , or “NE” for no effect) of each transaction (on January 1, 2, 3, and 5) on the accounting equation. Use the following schedule:

Date Assets = Liabilities + Stockholders’ Equity
Jan. 1 (Click to select) Note payable Accounts payable Cash No effect Equipment (Click to select) 1,200 +390 390 +1,200 20,900 13,400 +13,400 +20,900 NE (Click to select) Cash Accounts payable Note payable No effect Equipment (Click to select) +1,200 13,400 20,900 390 1,200 +390 +20,900 NE +13,400 (Click to select) Note payable Accounts payable Equipment Cash No effect
Jan. 2 (Click to select) Accounts payable No effect Cash Equipment Note payable (Click to select) +1,200 +390 +13,400 1,200 7,500 NE 390 13,400 +7,500 (Click to select) Note payable Equipment Cash No effect Accounts payable (Click to select) +13,400 1,200 +20,900 +390 +1,200 390 NE 20,900 13,400
(Click to select) Equipment Cash Accounts payable Note payable No effect (Click to select) +13,400 +20,900 +390 +1,200 20,900 NE 1,200 390 13,400
Jan. 3 (Click to select) Cash Note payable Accounts payable Supplies No effect (Click to select) +20,900 +390 +13,400 20,900 NE 13,400 +1,200 1,200 390
(Click to select) No effect Note payable Equipment Supplies Accounts payable (Click to select) +1,200 +13,400 390 20,900 NE 13,400 +20,900 1,200 +390
Jan. 5 (Click to select) No effect Note payable Supplies Accounts payable Cash (Click to select) +20,900 +13,400 390 +1,200 NE +390 13,400 20,900 1,200
(Click to select) No effect Supplies Equipment Note payable Accounts payable (Click to select) 20,900 1,200 390 NE +1,200 +13,400 +20,900 +390 13,400
Requirement 2:
Compute the acquisition cost of the machine.(Omit the “$” sign in your response.)
Acquisition cost $
Requirement 3:
Compute the depreciation expense to be reported for 2009.(Round your answer to the nearest dollar amount. Omit the “$” sign in your response.)
Depreciation $
Requirement 4:
What should be the book value of the machine at the end of 2010?(Round your answer to the nearest dollar amount. Omit the “$” sign in your response.)
Book value $