Swanson Products was organized as a new business on January 1, 2009. On that date, Swanson acquired

Question:

Swanson Products was organized as a new business on January 1, 2009. On that date, Swanson acquired equipment at a cost of $400,000, which is depreciated at a rate of $40,000 per year.

Required:
Describe how the equipment and its related depreciation will be reported on the at December 31, 2009, and on the 2009 income statement.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...