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Sellers Construction Company purchased a compressor for $107,700 cash. It had an estimated useful life of four years and a $11,900 salvage value. At the beginning of the third year of use, the company spent an additional $9,080 related to the equipment. The company's financial condition just prior to this expenditure is shown in the following statements model: Balance Sheet Cash + 13,320+ Assets Book Value of Compressor 59,800 Stockholders Equity Conmon Stock + Earnings 25,100 + 48,020 Income Statement Retained Statement of Revenue NA Expense Net Income Cash Flows NA NA NA Required Record the $9,080 expenditure in the statements model under each of the following independent assumptions: Note: In the Statement of Cash Flows column, use the initials "OA" for operating activities, "FA" for financing activities, and "IA" for investing activity. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input. a. The expenditure was for routine maintenance. b. The expenditure extended the compressor's life. c. The expenditure improved the compressor's operating capacity Sellers Construction Company b. C Horizontal Statements Model Balance Sheet Income Statement Assets Stockholders' Equity Statement of Cash Cashi · Book Value of Compressor Common Stock Retained Earnings Revenue Expenses Net Income Flows 13.320+ 59,800 25,100+ 48,020 . " + +

Sellers Construction Company purchased a compressor for $107,700 cash. It had an estimated useful life of four years and a $11,900 salvage value. At the beginning of the third year of use, the company spent an additional $9,080 related to the equipment. The company's financial condition just prior to this expenditure is shown in the following statements model: Balance Sheet Cash + 13,320+ Assets Book Value of Compressor 59,800 Stockholders Equity Conmon Stock + Earnings 25,100 + 48,020 Income Statement Retained Statement of Revenue NA Expense Net Income Cash Flows NA NA NA Required Record the $9,080 expenditure in the statements model under each of the following independent assumptions: Note: In the Statement of Cash Flows column, use the initials "OA" for operating activities, "FA" for financing activities, and "IA" for investing activity. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input. a. The expenditure was for routine maintenance. b. The expenditure extended the compressor's life. c. The expenditure improved the compressor's operating capacity Sellers Construction Company b. C Horizontal Statements Model Balance Sheet Income Statement Assets Stockholders' Equity Statement of Cash Cashi · Book Value of Compressor Common Stock Retained Earnings Revenue Expenses Net Income Flows 13.320+ 59,800 25,100+ 48,020 . " + +

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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Sellers Construction Company purchased a compressor for $107,700 cash. It had an estimated useful life of four years and a $11,900 salvage value. At the beginning of the third year of use, the company spent an additional $9,080 related to the equipment. The company's financial condition just prior to this expenditure is shown in the following statements model: Cash + 13,320 + Balance Sheet Stockholders' Equity Assets Book Value of Compressor Income Statement Conmon 59,800 + Retained Stock + Earnings 25,100 Statement of Revenue 48,020 NA Expense Net Income Cash Flows NA NA NA Required Record the $9,080 expenditure in the statements model under each of the following independent assumptions: Note: In the Statement of Cash Flows column, use the initials "OA" for operating activities, "FA" for financing activities, and "IA" for investing activity. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input. a. The expenditure was for routine maintenance. b. The expenditure extended the compressor's life. c. The expenditure improved the compressor's operating capacity b. Sellers Construction Company Horizontal Statements Model Balance Sheet Income Statement Assets Stockholders' Equity Cash Book Value of Compressor Common Stock Retained Revenue Expenses Net Income Statement of Cash Flows Earnings 13,320 + 59,800 25,100+ 48,020 . . . +
Transcribed Image Text:Sellers Construction Company purchased a compressor for $107,700 cash. It had an estimated useful life of four years and a $11,900 salvage value. At the beginning of the third year of use, the company spent an additional $9,080 related to the equipment. The company's financial condition just prior to this expenditure is shown in the following statements model: Cash + 13,320 + Balance Sheet Stockholders' Equity Assets Book Value of Compressor Income Statement Conmon 59,800 + Retained Stock + Earnings 25,100 Statement of Revenue 48,020 NA Expense Net Income Cash Flows NA NA NA Required Record the $9,080 expenditure in the statements model under each of the following independent assumptions: Note: In the Statement of Cash Flows column, use the initials "OA" for operating activities, "FA" for financing activities, and "IA" for investing activity. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input. a. The expenditure was for routine maintenance. b. The expenditure extended the compressor's life. c. The expenditure improved the compressor's operating capacity b. Sellers Construction Company Horizontal Statements Model Balance Sheet Income Statement Assets Stockholders' Equity Cash Book Value of Compressor Common Stock Retained Revenue Expenses Net Income Statement of Cash Flows Earnings 13,320 + 59,800 25,100+ 48,020 . . . +
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