E9-4 Recording Straight-Line Depreciation and Repairs [LO 9-2, LO 9-3] Wiater Co

Question

E9-4 Recording Straight-Line Depreciation and Repairs [LO 9-2, LO 9-3]

Wiater Company operates a small manufacturing facility. On January 1, 2013, an asset account for the company showed the following balances:

   During the first week of January 2013, the following expenditures were incurred for repairs and maintenance:

   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.

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 all amounts as positive values.)

Wiater Company operates a small manufacturing facility. On January 1, 2013, an asset account for the company showed the following balances:

Explanation / Answer

Answer:

Working notes:

Equipment

Year Assets "+/-" Amount = Liabilities "+/-" Amount + Stock holder's Equity "+/-" Amount Depreciation - 12 2012 Fixed Asset - 10000 = 0 0 0 Retained Earnings - 10000 Major overhaul 2013 Fixed Asset + 24000 = 0 0 0 0 2013 Cash - 24000 = 0 0 0 0 Net Effect 2013 Nil 0 0 0 0 0 Maintenance 2013 Cash - 1850 = 0 0 Retained Earnings - 1850

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.