Compute the acquisition cost of the equipment

Reference no: EM132091327

Question: Recording Asset Acquisition Costs and Straight-Line Depreciation Conover Company ordered equipment on January 1, 2009, at a purchase price of $30,000. On date of delivery, January 2, 2009, the company paid $8,000 for the equipment and signed a note payable for the balance. On January 3, 2009, it paid $250 for freight on the equipment. On January 5, Conover paid $1,500 cash for installation costs relating to the equipment. On December 31, 2009 (the end of the accounting period), Conover recorded depreciation on the equipment using the straight-line method with an estimated useful life of 10 years and an estimated residual value of $2,750.

Required: 1. Record journal entries, if any, that would be required on January 1, 2, 3, and 5.

2. Compute the acquisition cost of the equipment.

3. Compute the depreciation expense to be reported for 2009, and show the journal entry to record it. 4. What should be the book value of the equipment at the end of 2010?

Reference no: EM132091327

Questions Cloud

The importance of your diversity group in the workplace : What are two benefits of having your selected diversity group represented in the workplace?

Explain how to account for the renovation costs : Computing and Recording a Basket Purchase and Straight-Line Depreciation Bridge City Consulting bought a building and the land on which it is located.

Influence of domestic safety regulations increasing : Are the number and influence of domestic safety regulations increasing or decreasing in the motor carrier industry?

Which of these cash flow streams has the higher pv : Which of these cash flow streams has the higher PV if the discount rate is 10%? If the discount rate is 40%? please show the full calculations.

Compute the acquisition cost of the equipment : Recording Asset Acquisition Costs and Straight-Line Depreciation Conover Company ordered equipment on January 1, 2009, at a purchase price of $30,000.

Journalize the transactions events and closing entries : Dec. 31 Determined that net income for the year was $362,000. Journalize the transactions, events, and closing entries for net income and dividends

Computing partial-year depreciation under alternative method : Computing Partial-Year Depreciation under Alternative Methods A vehicle was purchased on July 1, 2009, at a cost of $50,000.

Flood of money has in emerging country like costa rica : Discuss the impact the flood of money has in an emerging country like Costa Rica.

Writing responsibly quiz : "Writing Responsibly: Understanding and Representing the Entire Source"

User Account

All Pages