COST AND DEPRECIATION On January 1, 2009, 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 six years and a residual value of $200. Quick Stop uses the straight-line method of depreciation.

Required:

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

. Prepare the adjusting entry to record 2009 depreciation expense on the new cooler.

. What is the book value of the cooler at the end of 2009?

Exercise