E8-5 Determining Financial Statement Effects of an Asset Acquisition and Depreciation (Straight-Line Depreciation) LO8-2, 8-3 [The following information applies to the questions displayed below) Steve's Outdoor Company purchased a new delivery van on January 1 for $65,000 plus $5,600 in sales tax. The company paid $14,600 cash on the van including the sales taxi with the $56,000 balance on credit at 8 percent interest due in nine months (on September 30). On January 2, the company pold cash of $900 to have the company name and logo painted on the van. On September 30, the company paid the balance due on the van plus the interest. On December 31 (the end of the accounting period. Steve's Outdoor recorded depreciation on the van using the straight-line method with an estimated useful life of 5 years and an estimated residual value of $6,500 References Section Break EB-5 Determining Financial Statement Efects of an Asset Acquisition and Depreciation (Straight line Depreciation LOB-2, 3-3 10.00 points Requiredvomation EB-5 Part 1 Required: 1. Indicate the effects (accounts, amounts, and or-) of each transaction on the accounting equation. Use the following schedule (if the transaction does not impact the accounting equation choose "No effect in the first column under "Assets") 5. value 10.00 points Required information E8-5 Part 1 Required: 1. Indicate the effects (accounts, amounts, and + or -) of each transaction on the accounting equation. Use the following scheduled the transaction does not impact the accounting equation choose "No effect in the first column under "Assets) Assets Liabilities Short term note payable Stockholders' Equity 70.600 56000 0 0 Date January 1 Equipment (Van) Cash January 2 Equipment (Van) Cash September 30 Cash (14,600) 900 (900) o ol 0 0 Short term note payable interest expense value 10.00 points E8-5 Part 2 2. Compute the acquisition cost of the van. Acquisition cost of the van Acquisition cost $ 0 Hints References eBook & Resources Check my work 7 value: 10.00 points E8-5 Part 3 3. Compute the depreciation expense to be reported for Year 1. Depreciation expense Hints References eBook & Resources Hint #1 Check my work WP Hint #1 Check my work 8. value 10.00 points E8-5 Part 5 5. What would be the net book value of the van at the end of Year 2? (Amounts to be deducted should be indicated by a minus vign) Net book value at end of year 2 $ 0