Worthington Chandler Companys fiscal year end is December 31. On January 1, 2016, Worthington acquired a piece of equipment for $40,000. Sales tax on the equipment was $2,000 and Worthington incurred freight charges of $600 to get the equipment delivered to its factory and $700 to install the equipment.

Q1. What should be the amount in the equipment account as a result of these events?

Q2. Assume that Worthington uses the straight line method of estimating depreciation and expects the equipment to be used for 10 years with a salvage value of $300. What is the annual amount of depreciation expense?

Q3. At December 31, 2020 (Worthington's fiscal year end), what is the amount of accumulated depreciation on the equipment after the depreciation adjustment is recorded?

Q4. At December 31, 2020 (Worthingtons fiscal year end), what is the amount of book value of the equipment?