McClain Company incurred the following expenditures during 2019: Apr. 9 The air conditioning system in the old manufacturing facility was replaced for $80,000. The old air conditioning system had a cost of $71,750 and a book value of $1,700. The old air conditioning system had no scrap value. 29 Annual maintenance of $39,500 was performed. The roof of the old manufacturing facility is replaced at a cost of $68,000. This expenditure substantially extended the life of the facility. June Sept. 12 Dec. 28 A new wing was added to the manufacturing facility at a cost of $261,000. This expenditure substantially increased the productive capacity of the plant. Required: 1. Prepare journal entries to record McClain's expenditures for 2019. 2. Next Level What is the effect on the financial statements if management had improperly accounted for the: a. addition of the new wing to the manufacturing facility b. annual maintenance expenditures

McClain Company incurred the following expenditures during 2019: Apr. 9 The air conditioning system in the old manufacturing facility was replaced for $80,000. The old air conditioning system had a cost of $71,750 and a book value of $1,700. The old air conditioning system had no scrap value. 29 Annual maintenance of $39,500 was performed. The roof of the old manufacturing facility is replaced at a cost of $68,000. This expenditure substantially extended the life of the facility. June Sept. 12 Dec. 28 A new wing was added to the manufacturing facility at a cost of $261,000. This expenditure substantially increased the productive capacity of the plant. Required: 1. Prepare journal entries to record McClain's expenditures for 2019. 2. Next Level What is the effect on the financial statements if management had improperly accounted for the: a. addition of the new wing to the manufacturing facility b. annual maintenance expenditures

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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