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A company replaces the electrical wiring system of a manufacturing facility. The new electrical wiring systems increases the economic utility but not the economic lives of the building. The original electrical wiring system cost $80,000 and was 80% depreciated. The new electrical wiring system cost $145,000. What is the effect of the necessary entry or entries on the accounting equation?

A company replaces the electrical wiring system of a manufacturing facility. The new electrical wiring systems increases the economic utility but not the economic lives of the building. The original electrical wiring system cost $80,000 and was 80% depreciated. The new electrical wiring system cost $145,000. What is the effect of the necessary entry or entries on the accounting equation?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A company replaces the electrical wiring system of a manufacturing facility. The new electrical wiring systems increases the economic utility but not the economic lives of the building. The original electrical wiring system cost $80,000 and was 80% depreciated. The new electrical wiring system cost $145,000. What is the effect of the necessary entry or entries on the accounting equation? Stockholders' Equity increases by $16,000 Total assets decrease by $16,000 Total assets increase by $145,000 Assets are unchanged O Stockholders' Equity decreases by $145,000
Transcribed Image Text:A company replaces the electrical wiring system of a manufacturing facility. The new electrical wiring systems increases the economic utility but not the economic lives of the building. The original electrical wiring system cost $80,000 and was 80% depreciated. The new electrical wiring system cost $145,000. What is the effect of the necessary entry or entries on the accounting equation? Stockholders' Equity increases by $16,000 Total assets decrease by $16,000 Total assets increase by $145,000 Assets are unchanged O Stockholders' Equity decreases by $145,000
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