24) Ms. Gardenia, the company bookkeeper, recorded the annual repair costs on the company's machinery as an increase to the Machinery account. As a result, which of the following statements correctly describes this situation? A) Assets will be overstated. B) Expenses will be overstated. C) Stockholders' equity will be understated. D) Liabilities will be overstated. 25) Mackenzie Manufacturing purchased equipment for $160,000. In addition, shipping charges of $2,000 were incurred to obtain the equipment. The company paid $12,500 to construct a foundation and install the equipment. The equipment is estimated to have a residual value of $15,000 at the end of its 5-year useful life. Using the straight-line method, what is the book value of the equipment at the end of the third full year of use? A) $55,300 B) $71,000 C) $78,800 D) $63,800 26) Beta Co. recorded a loss due to impairment of some of its assets. As a result of this journal entry: A) expenses are increased. C) liabilities are increased. B) stockholders' equity is increased. D) assets are decreased. 27) On December 31, 2018, Far Niente Winery sold a wine press for $545,000; the wine press had originally cost $900,000. Cash was paid by the buyer of the press. Accumulated Depreciation on the press, updated to the date of disposal, was $450,000. What is the effect of the sale on the balance sheet and income statement of Far Niente reported as of and for the year ended December 31, 2018? A) Increase assets; Increase net income. B) Decrease assets; Decrease net income. C) No effect on assets; increase net income. D) Decrease assets; Increase net income.