Refer to the information in E9- 4.
Required:
1. Give the adjusting journal entry that would have been made at the end of 2014 for depreciation on the manufacturing equipment.
2. Starting at the beginning of 2015, what is the remaining estimated life?
3. Give the journal entries to record the two expenditures for repairs and maintenance during 2015.
Refer info E9-4
Wiater Company operates a small manufacturing facility. On January 1, 2015, an asset account for the company showed the following balances:
Equipment………………………………………….. $ 160,000
Accumulated Depreciation (beginning of year)……… 100,000
During the first week of January 2015, the following expenditures were incurred for repairs and maintenance:
Routine maintenance and repairs on the equipment…………... $ 1,850
Major overhaul of the equipment that improved efficiency…… 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.