es Hulme Company operates a small manufacturing facility as a supplement to its regular service activities. At the beginning of the current year, an asset account for the company showed the following balances: Manufacturing equipment Accumulated depreciation through the end of last year During the current year, the following expenditures were incurred for the equipment: Major overhaul of the equipment on January 2 the current year that improved efficiency Routine repairs on the equipment $ 168,000 57,000 The equipment is being depreciated on a straight-line basis over an estimated life of 19 years with a $16,000 estimated residual value. The annual accounting period ends on December 31. $ 6,000 1,500 Required: Indicate the effects of the following on the accounting equation. Note: Enter decreases to account categories as negative amounts and do not round your intermediate calculations. Event 1. Adjustment for Depreciation 1. Adjustment for Depreciation 2a. Major overhaul of equipment 2a. Major overhaul of equipment 2a. Major overhaul of equipment 2b. Repairs and maintenance 2b. Repairs and maintenance 1. The adjustment for depreciation at the end of last year. 2. The two expenditures during the current year for (a) the major overhaul of the equipment and (b) repairs and maintenance. Assets Liabilities + + + + + + Stockholders' Equity
es Hulme Company operates a small manufacturing facility as a supplement to its regular service activities. At the beginning of the current year, an asset account for the company showed the following balances: Manufacturing equipment Accumulated depreciation through the end of last year During the current year, the following expenditures were incurred for the equipment: Major overhaul of the equipment on January 2 the current year that improved efficiency Routine repairs on the equipment $ 168,000 57,000 The equipment is being depreciated on a straight-line basis over an estimated life of 19 years with a $16,000 estimated residual value. The annual accounting period ends on December 31. $ 6,000 1,500 Required: Indicate the effects of the following on the accounting equation. Note: Enter decreases to account categories as negative amounts and do not round your intermediate calculations. Event 1. Adjustment for Depreciation 1. Adjustment for Depreciation 2a. Major overhaul of equipment 2a. Major overhaul of equipment 2a. Major overhaul of equipment 2b. Repairs and maintenance 2b. Repairs and maintenance 1. The adjustment for depreciation at the end of last year. 2. The two expenditures during the current year for (a) the major overhaul of the equipment and (b) repairs and maintenance. Assets Liabilities + + + + + + Stockholders' Equity
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:es
Hulme Company operates a small manufacturing facility as a supplement to its regular service activities. At the beginning of the
current year, an asset account for the company showed the following balances:
Manufacturing equipment
Accumulated depreciation through the end of last
year
During the current year, the following expenditures were incurred for the equipment:
Major overhaul of the equipment on January 2 the current year that improved efficiency
Routine repairs on the equipment
$ 168,000
57,000
The equipment is being depreciated on a straight-line basis over an estimated life of 19 years with a $16,000 estimated residual value.
The annual accounting period ends on December 31.
Required:
Indicate the effects of the following on the accounting equation.
Note: Enter decreases to account categories as negative amounts and do not round your intermediate calculations.
Event
1. Adjustment for Depreciation
1. Adjustment for Depreciation
2a. Major overhaul of equipment
2a. Major overhaul of equipment
2a. Major overhaul of equipment
2b. Repairs and maintenance
2b. Repairs and maintenance
$ 6,000
1,500
1. The adjustment for depreciation at the end of last year.
2. The two expenditures during the current year for (a) the major overhaul of the equipment and (b) repairs and maintenance.
Assets
=
Liabilities
+
+
+
+
+
+
+
Stockholders' Equity
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