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) $ 160,000 100,000 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 $ 1,850 24, 000 The equipment is being depreciated on a straight-line basis over an estimated life of 15 years with a $10,000 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 Stockholders' Equity with a minus sign. Do not round intermediate calculations.)
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) $ 160,000 100,000 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 $ 1,850 24, 000 The equipment is being depreciated on a straight-line basis over an estimated life of 15 years with a $10,000 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 Stockholders' Equity with a minus sign. Do not round intermediate calculations.)
Chapter1: Financial Statements And Business Decisions
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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)
$ 160,000
100,000
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
$ 1,850
24,000
The equipment is being depreciated on a straight-line basis over an estimated life of 15 years with a $10,000 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,
the headings shown below. (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a minus sign. Do not
using
round intermediate calculations.)
1. The adjustment for depreciation made last year at the end of 2020.
2. The two expenditures for repairs and maintenance during January 2021.
Liabilities
Stockholders' Equity
Item
Assets
Depreciation Expense
2020
Accumulated Depreciation-Equipment
Repairs and Maintenance Expense
%3D
2021
Cash
%3D
2021,
Equipment,
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