Question

Namaka Inc. (Namaka) recently purchased new display cases forits retail stores. The display cases cost $154,000, taxes were$22,400 (of which $19,900 is refundable), delivery cost $5,400, andset-up cost $8,800. Namaka’s management expects to use the displaycases for five years, at which time they will be replaced.Management uses straight-line depreciation on assets of this typeand estimates that the new display cases have a residual value of$5,400.

 

Required:

 

a.

Prepare the journal entry to record the purchase of the newdisplay cases.

 

 

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