Question
E8-7 (Algo) Recording Depreciation and Repairs (Straight-Line Depreciation) LO8-2, 8-3 Skip to question [The following information applies to the questions displayed below.] Hulme Company operates
E8-7 (Algo) Recording Depreciation and Repairs (Straight-Line Depreciation) LO8-2, 8-3
Skip to question
[The following information applies to the questions displayed below.]
Hulme Company operates a small manufacturing facility as a supplement to its regular service activities. At the beginning of the current year, an asset account for the company showed the following balances:
Manufacturing equipment | $ 114,800 |
---|---|
Accumulated depreciation through the end of last year | 50,400 |
During the current year, the following expenditures were incurred for the equipment:
Major overhaul of the equipment on January 2 the current year that improved efficiency | $ 10,000 |
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Routine repairs on the equipment | 1,300 |
The equipment is being depreciated on a straight-line basis over an estimated life of 16 years with a $14,000 estimated residual value. The annual accounting period ends on December 31.
E8-7 Part 3
Required:
3. Prepare the journal entries to record the two expenditures during current year.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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