Answer:
Explanation:
1.
January 1 Assets - no effect; Liabilities - no effect; Stockholder's equity - no effect
January 2 Assets: Cash -$8000; Equipment + $24000
Liabilities: Short term note payable +$16000
January 3 Assets: Cash -$700; Equipment +$700
January 5 Assets: Cash -$2500; Equipment +$2500
July 1 Assets: Cash -$16720; Liabilities: Short term note payable - $16,000
Stockholders equity - $720
*(24,000-8,000)*0.09*6/12 = $720
2. Acquisition cost of the machine:
Cash paid $8,000
Note payable with supplier $16,000
Freight costs $700
Installation costs $2,500
Acquisition cost $27,200
3. Depreciation(2013) = ($27,200 - residual value of $3,200) *1/10= $24,000/10 = $2400
5. Equipment cost = $27,200
Less: Depreciation [$2400*2] $4800
net book value of the machine at the end of 2014 $22,400
