1. The adjustment for depreciation made last year at the end of 2020. 2. The two expenditures for repairs and maintenance during January 2021.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 repairs and maintenance during January 2021.
Transcribed Image Text: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 repairs and maintenance during January 2021.
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