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). $ 200,000 62,000 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 $ 2,450 27,000 The equipment is being depreciated on a straight-line basis over an estimated life of 15 years with a $14,000 estimated residual value. The annual accounting period ends on December 31. Required: 1. Prepare the adjusting journal entry that would have been made at the end of 2020 for depreciation on the manufacturing equipment. 2. Starting at the beginning of 2021, what is the remaining estimated life? 3. Prepare the journal entries to record the two expenditures for repairs and maintenance during 2021.

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). $ 200,000 62,000 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 $ 2,450 27,000 The equipment is being depreciated on a straight-line basis over an estimated life of 15 years with a $14,000 estimated residual value. The annual accounting period ends on December 31. Required: 1. Prepare the adjusting journal entry that would have been made at the end of 2020 for depreciation on the manufacturing equipment. 2. Starting at the beginning of 2021, what is the remaining estimated life? 3. Prepare the journal entries to record the two expenditures for repairs and maintenance during 2021.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 15E: The following are independent errors: a. In January 2019, repair costs of 9,000 were debited to the...

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