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 $ 153,800 66,000 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 $ 12,000 1,900 The equipment is being depreciated on a straight-line basis over an estimated life of 18 years with a $17,000 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. 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

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 4PB: During the current year, Arkells Inc. made the following expenditures relating to plant machinery. ...

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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	$ 153,800
Accumulated depreciation through the end of last year	66,000

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	$ 12,000
Routine repairs on the equipment	1,900

The equipment is being depreciated on a straight-line basis over an estimated life of 18 years with a $17,000 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.

The adjustment for depreciation at the end of last year.
The two expenditures during the current year for (a) the major overhaul of the equipment and (b) repairs and maintenance.