Tower Company owned a service truck that was purchased at the beginning of 2018 for $31,000. 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, 2020, is shown in the following financial statements model.

Assets

=

Equity

Revenue

?

Expense

=

Net Income

Cash Flow

Cash

+

Mach.

?

Accumulated Depreciation

=

Common Stock

+

Retained Earnings

20,000

+

31,000

?

18,000

=

9,000

+

24,000

NA

?

NA

=

NA

NA

In 2020, Tower Company spent the following amounts on the truck:

Jan.	4		Overhauled the engine for $6,000. 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, $250.
Aug.	7		Replaced the fan belt and battery, $350.
Dec.	31		Purchased gasoline for the year, $7,500.
	31		Recognized 2018 depreciation expense.

Record the 2020 transactions in a statements model like the preceding one. (In the Cash Flow column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity, NC for net change and NA for not affected. Round your answers to the nearest dollar amount. Enter any decreases to account balances with a minus sign.)

TOWER COMPANY

Statements Model for 2020

Assets

=

Stockholders Equity

Revenue

?

Expense

=

Net Income

Cash Flow

Date

Cash

+

Mach.

?

Accumulated Depreciation

=

Common Stock

+

Retained Earnings

?

=

Balance

20,000

+

31,000

?

18,000

=

9,000

+

24,000

?

=

NA

1/4

(6,000)

+

6,000

?

=

+

?

=

(6,000)

IA

7/6

(250)

+

?

=

+

(250)

?

250

=

(250)

(250)

OA

8/7

(350)

+

?

=

+

(350)

?

350

=

(350)

(350)

OA

12/31

(7,500)

+

?

=

+

(7,500)

?

7,500

=

(7,500)

(7,500)

OA

12/31

+

?

8,000

=

+

(8,000)

?

8,000

=

(8,000)

NA

Total

5,900

+

37,000

?

26,000

=

9,000

+

7,900

0

?

16,100

=

(16,100)

(14,100)

NC