Sellers Construction Company purchased a compressor for $105,500 cash. It had an estimated useful life of four years and a $11,700 salvage value. At the beginning of the third year of use, the company spent an additional $6,710 related to the equipment. The companys financial condition just prior to this expenditure is shown in the horizontal statements model. Required Record the $6,710 expenditure in the statements model under each of the following independent assumptions: (In the Statement of Cash Flows column, use the initials "OA" for operating activities, "FA" for financing activities, and "IA" for investing activity. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input.)

1. The expenditure was for routine maintenance.
2. The expenditure extended the compressors life.
3. The expenditure improved the compressor's operating capacity.

Sellers Construction Company purchased a compressor for $105,500 cash. It had an estimated useful life of four years and a $11,700 salvage value. At the beginning of the third year of use, the company spent an additional $6,710 related to the equipment. The company's financial condition just prior to this expenditure is shown in the horizontal statements model. Required Record the $6,710 expenditure in the statements model under each of the following independent assumptions: (In the Statement of Cash Flows column, use the initials "OA" for operating activities, "FA" for financing activities, and "IA" for investing activity. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input.) a. The expenditure was for routine maintenance. b. The expenditure extended the compressor's life. c. The expenditure improved the compressor's operating capacity. SELLERS CONSTRUCTION COMPANY Horizontal Statements Model Balance Sheet Income Statement Assets Stockholders' Equity Book Value of Common Cash Retained Revenue Expenses + Compressor Stock 10,620 + 58,600 - 24,300 + 44,920 Net Income Statement of Cash Flows + Earnings Balance = a. + b. + C. + = +