Question

1. Impact on accounting equations

 Date Assets = Liabilities + Equity Jan 01 0 0 0 Jan 02 +15000 -4000 +15000 -4000 0 0 Jan 03 -200 +200 0 0 0 0 Jan 05 -900 +900 0 0 0 0

2. The acquisition cost of Machine = Purchase Cost + Freight Cost + Installation Cost

= 15000+200+900

= 16100

3. Depreciation expense for the first year = (Cost-Residual Value)/Useful Life

= (16100-1600)/10

= 14500/10

= 1450

4. Book Value of Machine at the end of Second Year = Cost - Dep for 1st Year - Dep for 2nd Year

= 16100- 1450-1450

= 13200

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