[The following information applies to the questions displayed below. Wiater Comp

Question

[The following information applies to the questions displayed below. 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 year) 258,750 $375,000 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 $3,850 44,000 The equipment is being depreciated on a straight-line basis over an estimated life of 20 years with a $30,000 estimated residual value. The annual accounting period ends on December 31

Explanation / Answer

Efffect of transaction :

Journal entry :

Calculation of depreciation = (375000-258750+44000-30000)/5 = 26050

Date Assets = Liabilities + shareholder's equity dec 31, 2015 Accumlated depreciation (26050) Depreciation expenses (26050)

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