Wiater Company operates a small manufacturing facility. On January 1, 2015, an a
ID: 2510947 • Letter: W
Question
Wiater Company operates a small manufacturing facility. On January 1, 2015, an asset account for the company showed the following balances Equipment Accumulated Depreciation (beginning of the year) $331,000 229,500 During the first week of January 2015, the following expenditures were incurred for repairs and maintenance Routine maintenance and repairs on the equipment Major overhaul of the equipment that improved efficiency $ 3,350 39,000 The equipment is being depreciated on a straight-line basis over an estimated life of 20 years with a $25,000 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 2014 The two expenditures for repairs and maintenance during January 2015 2. Item 2014 2015 Assets LiabilitiesExplanation / Answer
cost of equipment
331000
less scrap value
25000
value to be depreciated
306000
life of equipment in years
20
straight line method of depreciation
306000/20
15300
item
Assets
amount
=
Liabilities
+
Stock Holders equity
amount
2014
equipment
-15300
=
0
+
depreciation expense
-15300
2015
no effect
-3350
=
accounts payable
-3350
+
repair expenses
-3350
2015
equipment
39000
=
accounts payable
-39000
+
equipment
0
it is assume that repair and maintenance expenses are expenses related to overhauling are on credit basis
cost of equipment
331000
less scrap value
25000
value to be depreciated
306000
life of equipment in years
20
straight line method of depreciation
306000/20
15300
item
Assets
amount
=
Liabilities
+
Stock Holders equity
amount
2014
equipment
-15300
=
0
+
depreciation expense
-15300
2015
no effect
-3350
=
accounts payable
-3350
+
repair expenses
-3350
2015
equipment
39000
=
accounts payable
-39000
+
equipment
0
it is assume that repair and maintenance expenses are expenses related to overhauling are on credit basis
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.