O’connor company ordered a machine on january 1 at a purchase price of $20,000. on the date of delivery, january 2, the company paid $5,000 on the machine and signed a long-term note payable for the balance. on january 3, it paid $200 for freight on the machine. on january 5, o’connor paid cash for installation costs relating to the machine amounting to $1,200. on december 31 (the end of the accounting period), o’connor recorded depreciation on the machine using the straight-line method with an estimated useful life of 10 years and an estimated residual value of $2,100.
required:
1. indicate the effects (accounts, amounts, and + for increase, − for decrease) of each transaction (on january 1, 2, 3, and 5) on the accounting equation.
2. compute the acquisition cost of the machine.
3. compute the depreciation expense to be reported for the first year.
4. what should be the book value of the machine at the end of the second year?

Suppose that fizzo and pop hop are the only two firms that sell orange soda. the following payoff matrix shows the profit (in millions of dollars) each company will earn depending on whether or not it advertises: pop hopadvertise doesn’t advertisefizzo advertise 10, 10 18, 2doesn’t advertise 2, 18 11, 11for example, the upper right cell shows that if fizzo advertises and pop hop doesn't advertise, fizzo will make a profit of $18 million, and pop hop will make a profit of $2 million. assume this is a simultaneous game and that fizzo and pop hop are both profit-maximizing firms. if fizzo decides to advertise, it will earn a profit if pop hop advertises and a profit if pop hop does not advertise. if fizzo decides not to advertise, it will earn a profit if pop hop advertises and a profit if pop hop does not advertise. if pop hop advertises, fizzo makes a higher profit if it chooses (not to advertise, to .if pop hop doesn't advertise, fizzo makes a higher profit if it chooses (not to advertise, to . suppose that both firms start off not advertising. if the firms act independently, what strategies will they end up choosing? fizzo will choose to advertise and pop hop will choose not to advertise. both firms will choose to advertise. fizzo will choose not to advertise and pop hop will choose to advertise. both firms will choose not to advertise. again, suppose that both firms start off not advertising. if the firms decide to collude, what strategies will they end up choosing? fizzo will choose not to advertise and pop hop will choose to advertise. both firms will choose not to advertise. fizzo will choose to advertise and pop hop will choose not to advertise. both firms will choose to advertise.