ACQUISITION COSTS USING T-ACCOUNTS. Quick Stop, a convenience store, purchased a new soft-drink cooler. The cooler had a list price of $23,000. The manufacturing of the cooler offered Quick Stop terms of 3/15, n/30. Quick Stop paid cash for the cooler within the discount period and 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.

REQUIRED:

1. Prepare T-accounts and enter the effects of the transactions described above.

2. Using the T-accounts prepared in requirement 1 and any additional accounts that may be necessary, enter the adjustment to record 1 year’s straight-line depreciation on the new cooler. Assume an expected life of 6 years and residual value of $200.