E8-8 Determining Financial Statement Effects of Depreciation and Repairs (Straight-Line Depreciation) LO8-2, 8-3 Hulme Company operates a small manufacturing facility as a supplement to its regular service activities. At the beginning of 2017, an asset account for the company showed the following balances: $ Manufacturing equipment Accumulated depreciation through 2016 127,800 72,000 During 2017, the following expenditures were incurred for the equipment: S Routine maintenance and repairs on the equipment Major overhaul of the equipment that improved efficiency on January 2, 2017 800 20,000 The equipment is being depreciated on a straight-line basis over an estimated life of 17 years with a $19,000 estimated residual value. The annual accounting period ends on December 31, Required: Indicate the effects (accounts, amounts, and + or -) of the following on the accounting equation. (Do not round your intermediate calculations.) 1. The adjustment for depreciation at the end of 2016. 2. The two expenditures during 2017 Llabilities + Stockholders' Equity Event/Date Assets 1. 2016 Accumulated depreciation (6,400) 2a. 2017 Equipment Cash 2017 Cash (20,000) 20.000 (800) 2b. Repair and maintenance expense (800) E8-8 Determining Financial Statement Effects of Depreciation and Repairs (Straight-Line Depreciation) LO8-2, 8-3 Hulme Company operates a small manufacturing facility as a supplement to its regular service activities. At the beginning of 2017, an asset account for the company showed the following balances: $ Manufacturing equipment Accumulated depreciation through 2016 127,800 72,000 During 2017, the following expenditures were incurred for the equipment: S Routine maintenance and repairs on the equipment Major overhaul of the equipment that improved efficiency on January 2, 2017 800 20,000 The equipment is being depreciated on a straight-line basis over an estimated life of 17 years with a $19,000 estimated residual value. The annual accounting period ends on December 31, Required: Indicate the effects (accounts, amounts, and + or -) of the following on the accounting equation. (Do not round your intermediate calculations.) 1. The adjustment for depreciation at the end of 2016. 2. The two expenditures during 2017 Llabilities + Stockholders' Equity Event/Date Assets 1. 2016 Accumulated depreciation (6,400) 2a. 2017 Equipment Cash 2017 Cash (20,000) 20.000 (800) 2b. Repair and maintenance expense (800)