Wiater Company operates a small manufacturing facility. On January 1, 2021, an asset account for the company showed the following balances: Equipment Accumulated Depreciation (beginning of the year) $ 344,000 212,000 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 $ 3,550 41,000 The equipment is being depreciated on a straight-line basis over an estimated life of 15 years with a $26,000 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. Item 2020 2021 2021 Assets = = = Liabilities + + Stockholders' Equity

Wiater Company operates a small manufacturing facility. On January 1, 2021, an asset account for the company showed the following balances: Equipment Accumulated Depreciation (beginning of the year) $ 344,000 212,000 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 $ 3,550 41,000 The equipment is being depreciated on a straight-line basis over an estimated life of 15 years with a $26,000 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. Item 2020 2021 2021 Assets = = = Liabilities + + Stockholders' Equity

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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The following are independent errors: a. In January 2019, repair costs of 9,000 were debited to the Machinery account. At the beginning of 2019, the book value of the machinery was 100,000. No residual value is expected, the remaining estimated life is 10 years, and straight-line depreciation is used. b. All purchases of materials for construction contracts still in progress have been immediately expensed. It is discovered that the use of these materials was 10,000 during 2018 and 12,000 during 2019. c. Depreciation on manufacturing equipment has been excluded from manufacturing costs and treated as a period expense. During 2019, 40,000 of depreciation was accounted for in that manner. Production was 15,000 units during 2019, of which 3,000 remained in inventory at the end of the year. Assume there was no inventory at the beginning of 2019. Required: Prepare journal entries for the preceding errors discovered during 2020. Ignore income taxes.
During the current year, Arkells Inc. made the following expenditures relating to plant machinery. Renovated seven machines for $250,000 to improve efficiency in production of their remaining useful life of eight years Low-cost repairs throughout the year totaled $79,000 Replaced a broken gear on a machine for $6,000 A. What amount should be expensed during the period? B. What amount should be capitalized during the period?
Wiater Company operates a small manufacturing facility. On January 1, 2021, an asset account for the company showed the following balances: Equipment Accumulated Depreciation (beginning of the year) $ 344,000 212,000 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 $ 3,550 41,000 The equipment is being depreciated on a straight-line basis over an estimated life of 15 years with a $26,000 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…
Wiater Company operates a small manufacturing facility. On January 1, 2021, an asset account for the company showed the following balances: Equipment Accumulated Depreciation (beginning of the year) During the first week of January 2021, the following cash expenditures were incurred for repairs and maintenance: Routine maintenance and repairs on the equipment $ 3,350 39,000 Major overhaul of the equipment that improved efficiency $ 331,000 229,500 The equipment is being depreciated on a straight-line basis over an estimated life of 20 years with a $25,000 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…
Wiater Company operates a small manufacturing facility. On January 1, 2021, an asset account for the company showed the following balances: Equipment Accumulated Depreciation (beginning of the year). $ 200,000 62,000 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 $ 2,450 27,000 The equipment is being depreciated on a straight-line basis over an estimated life of 15 years with a $14,000 estimated residual value. The annual accounting period ends on December 31. Required: 1. Prepare the adjusting journal entry that would have been made at the end of 2020 for depreciation on the manufacturing equipment. 2. Starting at the beginning of 2021, what is the remaining estimated life? 3. Prepare the journal entries to record the two expenditures for repairs and maintenance during 2021.
Wiater Company operates a small manufacturing facility. On January 1, 2021, an asset account for the company showed the following balances: Equipment Accumulated Depreciation (beginning of the year) During the first week of January 2021, the following cash expenditures were incurred for repairs and maintenance: Routine maintenance and repairs on the equipment $ 3,150 37,000 Major overhaul of the equipment that improved efficiency The equipment is being depreciated on a straight-line basis over an estimated life of 20 years with a $23,000 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…
Stacey Company operates a small manufacturing facility as a supplement to its regular service activities. At the beginning of 2021, an asset account for the company showed the following balances: Manufacturing equipment Accumulated depreciation through 2020 $95,400 60,000 In early January 2021, the following expenditures were incurred for repairs and maintenance: Routine maintenance and repairs on the equipment Major overhaul of the equipment 910 11,100 The equipment is being depreciated on a straight-line basis over an estimated life of 15 years, with a $5,400 estimated residual value. The company's fiscal year ends on December 31. Required: 1. Calculate the depreciation expense for the manufacturing equipment for 2020. Depreciation expense 2. Prepare the journal entries to record the two expenditures that occurred during 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet…
Wister Company operates a small manufacturing facility. On January 1, 2021, an asset account for the company showed the following balances: Equipment Accumulated Depreciation (beginning of the year) 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 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…
Wiater Company operates a small manufacturing facility. On January 1, 2018, an asset account for the company showed the following balances: Equipment $ 220,000 Accumulated Depreciation (beginning of the year) 101,500 During the first week of January 2018, the following expenditures were incurred for repairs and maintenance: Routine maintenance and repairs on the equipment $ 2,550 Major overhaul of the equipment that improved efficiency 31,000 The equipment is being depreciated on a straight-line basis over an estimated life of 20 years with a $17,000 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.) The adjustment for depreciation made last…
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…
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…
how to journalize McClain Company incurred the following expenditures during 2019: Apr. 9 the air conditioning system in the old manufacturing facility was replaced for 83,000. the old air conditioning syste, had a cost of $74,000 and a book value of $2,000. the old air conditioning system had no scrap value. June 29 Annual maintenance of $38,000 was performed.