Question)On Jan. 1, 2014 Amr Company purchased equipment at a cash price of $60,000.Related expenditures are custom 2,000, value added taxes $3,000, painting and lettering $2000, and a three-year accident insurance policy $1,500.

The useful life of the equipment is four years.

The estimated salvage value at the end of the life of the equipment is 7,000.

Required:

1- Prepare the journal entries to record the amounts paid at Jan. 1, 2014.

2- Show the effect on the statement of financial position (balance sheet) at Jan. 1, 2014.

3- Compute the annual depreciation of the equipment (use straight line method).

4- Prepare the journal entry to record the depreciation at Dec. 31, 2014.

5- Show the effect on the statement of income statement and statement of financial position (balance sheet) at Dec. 31, 2014.

1- The generaljournal on Jan. 1, 2014: The cost of equipment = 2- The statement of nancial position (balance sheet) as of January 2014 3- Compute the annual depreciation of the equipment (use straight line method). The annual depreciation of the equipment= 4- Prepare the journal entry to record the depreciation at Dec. 31, 2014.] 5- Show the effect on the statement of income statement and statement of financial position (balance sheet) at Dec. 31, 2014. The income statement for the year ended Dec. 31, 2014 Expenses: Depreciation expense The statement of financial position (balance sheet) as of Dec. 31, 2014 Assets Noncurrent assets: Equipment Less: Accumulated dep. (The book value of equipment) 6- Complete the following table: Year Depreciation Accumulated Book value= expense depreciation Cost - accumulated (income statement) (balance sheet) depreciation 2014 2015 2016 2017