Question
Apac Construction Company purchased a forklift for $108,400 cash. It had an estimated useful life of four years and a $11,100 salvage value. At the
Apac Construction Company purchased a forklift for $108,400 cash. It had an estimated useful life of four years and a $11,100 salvage value. At the beginning of the third year of use, the company spent an additional $9,330 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 $9,330 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. |
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