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 $63,000 plus $5,400 in sales tax. The company paid $14,400 cash on the van (including the sales tax), with the $54,000 balance on credit at 9 percent interest due in nine months (on September 30). On January 2, the company paid cash of $700 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 $6,300. E8-5 Part 1 Required: 1. Indicate the effects (accounts, amounts, and + or - ) of each transaction on the accounting equation. Use the following schedule: (lf the transaction does not impact the accounting equation choose "No effect" in the first column under "Assets".) Date Assets Liabilities + Stockholders' Equity January 1 January 2 September 30 E8-5 Part 2 2. Compute the acquisition cost of the van. Acquisition cost of the van Acquisition cost $ 0 E8-5 Part 3 3. Compute the depreciation expense to be reported for Year 1. Depreciation expense 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 sign.) Net book value at end of year 2 $ 0 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 $63,000 plus $5,400 in sales tax. The company paid $14,400 cash on the van (including the sales tax), with the $54,000 balance on credit at 9 percent interest due in nine months (on September 30). On January 2, the company paid cash of $700 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 $6,300. E8-5 Part 1 Required: 1. Indicate the effects (accounts, amounts, and + or - ) of each transaction on the accounting equation. Use the following schedule: (lf the transaction does not impact the accounting equation choose "No effect" in the first column under "Assets".) Date Assets Liabilities + Stockholders' Equity January 1 January 2 September 30 E8-5 Part 2 2. Compute the acquisition cost of the van. Acquisition cost of the van Acquisition cost $ 0 E8-5 Part 3 3. Compute the depreciation expense to be reported for Year 1. Depreciation expense 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 sign.) Net book value at end of year 2 $ 0