$2$

E$9-3($Algo$)$ Determining Financial Statement Effects of an Asset Acquisition and Straight$-$Line Depreciation $[$LO$9-2,$ LO$9-3]$

$2$

Conover Corp. ordered a machine on January $1$ at a purchase price of $$29,020.$ On delivery, January $2,$ the company paid $$7,800$ on the machine and signed a note payable for the balance. On January $3,$ it paid $$230$ for freight on the machine. On January $5,$ Conover paid installation costs relating to the machine amounting to $$1,400.$ On December $31($the end of the accounting period$),$ Conover recorded depreciation on the machine using the straight$-$line method with an estimated usefullife of ten years and an estimated residual value of $$2,650.$

ebook

Required:

Indicate the effects $($accounts$,$ amounts$)$ of each transaction $($on January $1,2,3,$ and $5)$ on the accounting equation. Use the following schedule:

Note: Enter any decreases to accounts with a minus sign.

References

$\backslash$table$[[$Date$,$Assets,$=,$Liabilities,$+,$Stockholders' Equity$],[$Jan$.1,,,,,],[$Jan$.2,,,,,],[,,,,,],[$Jan $3,,,,,],[,,,,,],[$Jan$.5,,,,,],[,,,,,]]$

Compute the acquisition cost of the machine.

Acquisition cost

$3.$ Compute the depreciation expense to be reported for the first year.

Depreciation

$4.$ What should be the book value of the machine at the end of the second year?

Book value

English $($Canada$)$

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