6.Houstons Shredding Service has just completed a minor repair on a shredding machine. The repair cost was $1,110, and the book value prior to the repair was $5,170. In addition, the company spent $8,500 to replace the roof on a building. The new roof extended the life of the building by five years. Prior to the roof replacement, the general ledger reflected the Building account at $86,900 and related Accumulated Depreciation account at $38,300.

Required

After the work was completed, what book value should Houstons report on the balance sheet for the shredding machine and the building?

2.Apac Construction Company purchased a forklift for $115,600 cash. It had an estimated useful life of four years and a $8,500 salvage value. At the beginning of the third year of use, the company spent an additional $8,440 that was related to the forklift. The companys financial condition just prior to this expenditure is shown in the following statements model.

Required

Record the $8,440 expenditure in the statements model under each of the following independent assumptions. The first event is recorded as an example. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity and NA to indicate the element is not affected by the event. (Enter any decreases to account balances and cash outflows with a minus sign.)

a.	The expenditure was for routine maintenance.
b.	The expenditure extended the forklifts life.
c.	The expenditure improved the forklifts operating capacity.

3.On January 1, 2014, Liken Enterprises purchased a parcel of land for $10,800 cash. At the time of purchase, the company planned to use the land for future expansion. In 2015, Liken Enterprises changed its plans and sold the land.

Required

a.	Assume that the land was sold for $11,988 in 2015.

1.	Show the effect of the sale on the accounting equation. (Enter any decreases to account balances with a minus sign.). 2. What amount would Liken report on the income statement related to the sale of the land?

3.	What amount would Liken report on the statement of cash flows related to the sale of the land?

b.	Assume that the land was sold for $10,152 in 2015.

1.

Show the effect of the sale on the accounting equation. (Enter any decreases to account balances with a minus sign.)

2.	What amount would Liken report on the income statement related to the sale of the land?

3. What amount would Liken report on the statement of cash flows related to the sale of the land?