Wiater Company operates a small manufacturing facility. On January 1, 2021, an asset account for the company showed the following balances: Equipment Accumulated Depreciation (beginning of the year) $ 344,000 212,000 During the first week of January 2021, the following cash expenditures were incurred for repairs and maintenance: Routine maintenance and repairs on the equipment Major overhaul of the equipment that improved efficiency $ 3,550 41,000 The equipment is being depreciated on a straight-line basis over an estimated life of 15 years with a $26,000 estimated residual value. The annual accounting period ends on December 31. Required: Indicate the effects (accounts, amounts, and + for increase and - for decrease) of the following two items on the accounting equation, using the headings shown below. (Enter any decreases to Assets, Liabilities or Stockholder's Equity with a minus sign.) 1. The adjustment for depreciation made last year at the end of 2020. 2. The two expenditures for repairs and maintenance during January 2021. Item 2020 2021 2021 Assets = = = Liabilities + + Stockholders' Equity
Wiater Company operates a small manufacturing facility. On January 1, 2021, an asset account for the company showed the following balances: Equipment Accumulated Depreciation (beginning of the year) $ 344,000 212,000 During the first week of January 2021, the following cash expenditures were incurred for repairs and maintenance: Routine maintenance and repairs on the equipment Major overhaul of the equipment that improved efficiency $ 3,550 41,000 The equipment is being depreciated on a straight-line basis over an estimated life of 15 years with a $26,000 estimated residual value. The annual accounting period ends on December 31. Required: Indicate the effects (accounts, amounts, and + for increase and - for decrease) of the following two items on the accounting equation, using the headings shown below. (Enter any decreases to Assets, Liabilities or Stockholder's Equity with a minus sign.) 1. The adjustment for depreciation made last year at the end of 2020. 2. The two expenditures for repairs and maintenance during January 2021. Item 2020 2021 2021 Assets = = = Liabilities + + Stockholders' Equity
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Domestic
Transcribed Image Text:Wiater Company operates a small manufacturing facility. On January 1, 2021, an asset account for the company showed the following
balances:
Equipment
Accumulated Depreciation (beginning of the year)
$ 344,000
212,000
During the first week of January 2021, the following cash expenditures were incurred for repairs and maintenance:
Routine maintenance and repairs on the equipment
Major overhaul of the equipment that improved efficiency
$ 3,550
41,000
The equipment is being depreciated on a straight-line basis over an estimated life of 15 years with a $26,000 estimated residual value.
The annual accounting period ends on December 31.
Required:
Indicate the effects (accounts, amounts, and + for increase and - for decrease) of the following two items on the accounting equation,
using the headings shown below. (Enter any decreases to Assets, Liabilities or Stockholder's Equity with a minus sign.)
1. The adjustment for depreciation made last year at the end of 2020.
2. The two expenditures for repairs and maintenance during January 2021.
Item
2020
2021
2021
Assets
=
=
=
Liabilities
+
+
Stockholders' Equity
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