Tower Company owned a service truck that was purchased at the beginning of Year 1 for $43,000 It had an estimated life of three years and an estimated salvage value of $4,000 Tower company uses straight line depreciation Its financial condition as of January 1, Year 3, is shown on the first line of the horizontal statements model In Year 3, Tower Company spent the following amounts on the truck Jan 4 Overhauled the engine for $7,100 The estimated life was extended one additional year, and the salvage value was revised to $3,000 July 6 Obtained oil change and transmission service, $360 Aug 7 Replaced the fan belt and battery, $460 Dec 31 Purchased gasoline for the year, $8,600 31 Recognized Year 3 depreciation expense Required Record the Year 3 transactions in a statements model (In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), a financing activity (FA), or net change in cash (NC) leave the cell blank if the Statement of Cash Flows is not affected Enter any decreases to account balances and cash outflows with a minus sign Not all cells will require entry )

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Posted on Oct 01, 2024

Tower Company owned a service truck that was purchased at the beginning of Year 1 for $43,000. It had an estimated life of three years

Tower Company owned a service truck that was purchased at the beginning of Year 1 for $43,000. It had an estimated life of three years and an estimated salvage value of $4,000. Tower company uses straight-line depreciation. Its financial condition as of January 1, Year 3, is shown on the first line of the horizontal statements model.

In Year 3, Tower Company spent the following amounts on the truck:


Jan.	4	Overhauled the engine for $7,100. The estimated life was extended one additional year, and the salvage value was revised to $3,000.
July	6	Obtained oil change and transmission service, $360.
Aug.	7	Replaced the fan belt and battery, $460.
Dec.	31	Purchased gasoline for the year, $8,600.
	31	Recognized Year 3 depreciation expense.

Required

Record the Year 3 transactions in a statements model. (In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), a financing activity (FA), or net change in cash (NC); leave the cell blank if the Statement of Cash Flows is not affected. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells will require entry.)