Cost and DepreciationOn January 1, 2019, Quick Stop, a convenience store, purchased a new soft-drink cooler. Quick Stop paid $23,000 cash for the cooler. Quick Stop also paid $730 to have the cooler shipped to its location. After the new cooler arrived, Quick Stop paid $2,410 to have the old cooler dismantled and removed. Quick Stop also paid $820 to a contractor to have new wiring and drains installed for the new cooler. Quick Stop estimated that the cooler would have a useful life of 6 years and a residual value of $200. Quick Stop uses the straight-line method of depreciation.1. Prepare any necessary journal entries to record the cost of the cooler.Jan. 1 fill in the blank b1e8c7fa4fc3fac_2 fill in the blank b1e8c7fa4fc3fac_4 (Record purchase of equipment) 2. Prepare the adjusting entry to record 2019 depreciation expense on the new cooler.Dec. 31 fill in the blank b95aef08e003ff9_2 fill in the blank b95aef08e003ff9_4 (Record straight-line depreciation) 3. What is the book value of the cooler at the end of 2019?$fill in the blank 03199cfca044fd0_14. Conceptual Connection: If Quick Stop had used a useful life of 10 years and a residual value of $1,500, how would this effect depreciation expense for 2019 and the book value of the cooler at the end of 2019?Depreciation expense for 2019$fill in the blank 03199cfca044fd0_2Book value of the cooler at the end of 2019$fill in the blank 03199cfca044fd0_3

Hi student Since there are multiple subparts, we will answer only first three subparts. If you want…

Answered: Cost and Depreciation On January 1,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Cost and Depreciation

On January 1, 2019, Quick Stop, a convenience store, purchased a new soft-drink cooler. Quick Stop paid $23,000 cash for the cooler. Quick Stop also paid $730 to have the cooler shipped to its location. After the new cooler arrived, Quick Stop paid $2,410 to have the old cooler dismantled and removed. Quick Stop also paid $820 to a contractor to have new wiring and drains installed for the new cooler. Quick Stop estimated that the cooler would have a useful life of 6 years and a residual value of $200. Quick Stop uses the straight-line method of depreciation.

1. Prepare any necessary journal entries to record the cost of the cooler.

Jan. 1		fill in the blank b1e8c7fa4fc3fac_2
			fill in the blank b1e8c7fa4fc3fac_4
	(Record purchase of equipment)

2. Prepare the adjusting entry to record 2019 depreciation expense on the new cooler.

Dec. 31		fill in the blank b95aef08e003ff9_2
			fill in the blank b95aef08e003ff9_4
	(Record straight-line depreciation)

3. What is the book value of the cooler at the end of 2019?
$fill in the blank 03199cfca044fd0_1

4. Conceptual Connection: If Quick Stop had used a useful life of 10 years and a residual value of $1,500, how would this effect depreciation expense for 2019 and the book value of the cooler at the end of 2019?

Depreciation expense for 2019	$fill in the blank 03199cfca044fd0_2
Book value of the cooler at the end of 2019	$fill in the blank 03199cfca044fd0_3

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions