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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 $ 6,000 Routine repairs on the equipment 1,000 The equipment is being depreciated on a straight-line basis over an estimated life of 17 years with a $11,000 estimated residual value. The annual accounting period ends on December 31. $ 135, 100 57,000 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. 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. 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 Assets = = = Liabilities + Stockholders' Equity

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 $ 6,000 Routine repairs on the equipment 1,000 The equipment is being depreciated on a straight-line basis over an estimated life of 17 years with a $11,000 estimated residual value. The annual accounting period ends on December 31. $ 135, 100 57,000 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. 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. 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 Assets = = = Liabilities + Stockholders' Equity

Financial Accounting Intro Concepts Meth/Uses
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter10: Long-lived Tangible And Intangible Assets
Section: Chapter Questions
Problem 29P
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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 $ 6,000 Routine repairs on the equipment 1,000 The equipment is being depreciated on a straight-line basis over an estimated life of 17 years with a $11,000 estimated residual value. The annual accounting period ends on December 31. $ 135, 100 57,000 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. 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. 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 Assets || = = = = || = Liabilities + + + + + + + + Stockholders' Equity
Transcribed Image Text: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 $ 6,000 Routine repairs on the equipment 1,000 The equipment is being depreciated on a straight-line basis over an estimated life of 17 years with a $11,000 estimated residual value. The annual accounting period ends on December 31. $ 135, 100 57,000 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. 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. 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 Assets || = = = = || = Liabilities + + + + + + + + Stockholders' Equity
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