Oconnor company ordered a machine on january 1 2012 at a

Reference no: EM13484151

O'Connor Company ordered a machine on January 1, 2012, at a purchase price of $40,000. On the date of delivery, January 2, 2012, the company paid $10,000 on the machine and signed a Iong-term note payable for the balance. On January 3, 2012, it paid $350 for freight on the machine. On January 5, O'Connor paid installation costs relating to the machine amounting to $2,400. On December 31, 2012 (the end of the accounting period), O'Connor recorded depreciation on the machine using the straight-line method with an estimated useful life of 10 years and an estimated residual value of $4,750.

Required:

1.Indicate the effects (accounts, amounts, and + for increase, ? for decrease) of each transaction (on January 1, 2, 3, and 5) on the accounting equation. (Enter all amounts as positive values.)

2. Compute the acquisition cost of the machine.

3.Compute the depreciation expense to be reported for 2012. (Do not round intermediate calculations.)

4.What should be the book value of the machine at the end of 2013? (Do not round intermediate calculations.)

Reference no: EM13484151

Questions Cloud

You are a management accountant for baker company christy : you are a management accountant for baker company. christy reelitz the sales representative for one of bakers suppliers

A firm has net sales of 3000 cash expenses including taxes : a firm has net sales of 3000 cash expenses including taxes of 1400 and depreciation of 500. if accounts receivable

You hedge your interest rate risk with a euro dollar : two months from today you plan to borrow 3 million for 6 months at libor. you hedge your interest rate risk with a euro

Suppose the required reserve ratio were 10 of checkable : suppose the required reserve ratio were 10 of checkable deposits and the simple deposit multiplier applied. using

Oconnor company ordered a machine on january 1 2012 at a : oconnor company ordered a machine on january 1 2012 at a purchase price of 40000. on the date of delivery january 2

If a bonds coupon rate is lower than its yield to maturity : the following statements are true. explain why.a. if a bonds coupon rate is higher than its yield to maturity then the

What other analysis would you conduct if you were : using the company that you used for your mid-term assignment you are to conduct the following additional analysisfrom

Complete the required journal entries to record the bond : on january 1 2012 surreal manufacturing issued 600 bonds each with a face value of 1000 a stated interest rate of 3

Suppose spot interest rates fell by 2 percentage points : consider a bank with the following balance sheetassets millionsliabilities millionsreserves35zero-interest

User Account

All Pages