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OConnor Company ordered a machine on January 1 at a purchase price of $15,000. On the date of delivery, January 2, the compaRequired Parts 1-4 Please!

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Answer #1

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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