On January 1, Year 2, Webb Construction Company overhauled four cranes resulting in a slight increase in the life of the cranes. Such overhauls occur regularly at two-year intervals and have been treated as maintenance expense in the past. Management is considering whether to capitalize this years $27,930 cash cost in the Cranes asset account or to expense it as a maintenance expense. Assume that the cranes have a remaining useful life of two years and no expected salvage value. Assume straight-line depreciation. Required

Determine the amount of additional depreciation expense Webb would recognize in Year 2 and Year 3 if the cost were capitalized in the Cranes account.

Determine the amount of expense Webb would recognize in Year 2 and Year 3 if the cost were recognized as maintenance expense.

Determine the effect of the overhaul on cash flow from operating activities for Year 2 and Year 3 if the cost were capitalized and expensed through depreciation charges. (Cash outflows should be indicated with a minus sign.)

Determine the effect of the overhaul on cash flow from operating activities for Year 2 and Year 3 if the cost were recognized as maintenance expense. (Cash outflows should be indicated with a minus sign.)