Wiater Company operates a small manufacturing facility. On January 1, 2021, an asset account for the company showed the following balances: Equipment $ 231,000 Accumulated Depreciation (beginning of the year) 109,500 During the first week of January 2021, the following cash expenditures were incurred for repairs and maintenance: Routine maintenance and repairs on the equipment Major overhaul of the equipment that improved efficiency $2,050 26,000 The equipment is being depreciated on a straight-line basis over an estimated life of 20 years with a $12.000 estimated residual value. The annual accounting period ends on December 31. Required: Indicate the effects (accounts, amounts, and+for increase and for decrease) of the following two items on the accounting equation using the headings shown below. (Enter any decreases to Assets, Liabilities or Stockholder's Equity with a minus sign.) 1. The adjustment for depreciation made last year at the end of 2020, 2. The two expenditures for repairs and maintenance during January 2021.
Wiater Company operates a small manufacturing facility. On January 1, 2021, an asset account for the company showed the following balances: Equipment $ 231,000 Accumulated Depreciation (beginning of the year) 109,500 During the first week of January 2021, the following cash expenditures were incurred for repairs and maintenance: Routine maintenance and repairs on the equipment Major overhaul of the equipment that improved efficiency $2,050 26,000 The equipment is being depreciated on a straight-line basis over an estimated life of 20 years with a $12.000 estimated residual value. The annual accounting period ends on December 31. Required: Indicate the effects (accounts, amounts, and+for increase and for decrease) of the following two items on the accounting equation using the headings shown below. (Enter any decreases to Assets, Liabilities or Stockholder's Equity with a minus sign.) 1. The adjustment for depreciation made last year at the end of 2020, 2. The two expenditures for repairs and maintenance during January 2021.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 15E: The following are independent errors: a. In January 2019, repair costs of 9,000 were debited to the...
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