The Mountaineers are a nationally recognized football team that recently purchased gym equipment for $112,000 cash. The equipment had an estimated useful life of ten years and a $8,200 salvage value. At the beginning of the fourth year of use, the company spent an additional $28,000 related to the equipment. The company's financial condition just prior to this expenditure is shown in the following statements model Required: Record the $28,000 expenditure in the statements model under each of the following independent assumptions a. The expenditure was for routine maintenance b. The expenditure extended the compressor's life. c. The expenditure improved the compressor's operating capacity. Note: In the Cash Flow column, use OA to designate operating activity, IA for Investment activity, FA for financing activity, and NC for net change in cash. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require an Input- leave cells blank if there is no corresponding input needed. Event Number Beg # C 6 Cash Assets 100,000+ + . Book Value of Gymn Equipment Balance Sheet Liabilibes 00.000- - Accounts Payable . Stockholders' Equity Retained Earnings Common Stock 00.000 100,000 Revenue Income Statement Expenses Net Income Stament of Cash Flows
The Mountaineers are a nationally recognized football team that recently purchased gym equipment for $112,000 cash. The equipment had an estimated useful life of ten years and a $8,200 salvage value. At the beginning of the fourth year of use, the company spent an additional $28,000 related to the equipment. The company's financial condition just prior to this expenditure is shown in the following statements model Required: Record the $28,000 expenditure in the statements model under each of the following independent assumptions a. The expenditure was for routine maintenance b. The expenditure extended the compressor's life. c. The expenditure improved the compressor's operating capacity. Note: In the Cash Flow column, use OA to designate operating activity, IA for Investment activity, FA for financing activity, and NC for net change in cash. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require an Input- leave cells blank if there is no corresponding input needed. Event Number Beg # C 6 Cash Assets 100,000+ + . Book Value of Gymn Equipment Balance Sheet Liabilibes 00.000- - Accounts Payable . Stockholders' Equity Retained Earnings Common Stock 00.000 100,000 Revenue Income Statement Expenses Net Income Stament of Cash Flows
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Mountaineers are a nationally recognized football team that recently purchased gym equipment for $112.000 cash. The equipment
had an estimated useful life of ten years and a $8,200 salvage value. At the beginning of the fourth year of use, the company spent an
additional $28,000 related to the equipment. The company's financial condition just prior to this expenditure is shown in the following
statements model
Required:
Record the $28,000 expenditure in the statements model under each of the following independent assumptions
a. The expenditure was for routine maintenance.
b. The expenditure extended the compressor's life.
c. The expenditure improved the compressor's operating capacity.
Note: In the Cash Flow column, use OA to designate operating activity, IA for Investment activity, FA for financing activity, and NC
for net change in cash. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require an
Input- leave cells blank If there is no corresponding Input needed.
Event
Number
Beg
#
b
6
Cash
Assets
100,000+
.
Book Value of
Oye
Equipment
Balance Sheet
00.000-
Liabilities + Stockholders' Equity
Accounts
Payable
+
Common
Stook
00.000+
.
Retained
Earnings
100,000
Revenue
income Statement
Expenses
Not
Income
Stargment of Cash
Flows
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