(Solved by Humans)-Problem E8-4: Determining Financial Statement Effects of an Asset Acquisition and Depreciation...

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Problem E8-4: Determining Financial Statement Effects of an Asset Acquisition and Depreciation (Straight-Line Depreciation) Yoshi Corporation ordered a machine on January 1, 2015, at an invoice price of $21,000. On the date of delivery, January 2, 2015, the company paid $6,000 on the machine, with the balance on credit at 10 percent interest. On January 3, 2015, it paid $1,000 for freight on the machine. On January 5, Yoshi paid installation costs relating to the machine amounting to $2,500. On July 1, 2015, the company paid the balance due on the machine plus the interest. On December 31, 2015 (the end of the accounting period), Yoshi recorded depreciation on the machine using the straight-line method with an estimated useful life of ten years and an estimated residual value of $4,000. Required (round all amounts to the nearest dollar): 1. Indicate the effects (accounts, amounts, and + or -) of each transaction (on January 1, 2, 3, and 5 and July 1) on the accounting equation. Use the following schedule: Date: Assets = Liabilities + Stockholders’ Equity 2. Compute the acquisition cost of the machine. 3. Compute the depreciation expense to be reported for 2015. 4. What impact does the interest paid on the 10 percent note have on the cost of the machine? Under what circumstances can interest expense be included in acquisition cost? 5. What would be the net book value of the machine at the end of 2016?