During the 2004 annual accounting period, Chu Corporation completed the following transactions:

o. On January 1, 2004, purchased a license for $7,200 cash (estimated useful life, three years).

b. On January 1. 2004, repaved the parking lot of the building leased from I. Kumara. The cost was

$7,800; the estimated useful life was five years with no residual value. The company uses straightline depreciation. The lease will expire in 10 years.

c. On July 1, 2004. purchased another business for SI 20,000 cash. The transaction included SI 15.000 for assets and $24,000 for the liabilities assumed by Chu. The remainder was goodwill with an indefinite life.

d. On December 31, 2004, sold Machine A for S5.000 cash. Original cost. $21,500; accumulated depreciation (straight line) to December 31, 2003, $13,500 ($3,500 residual value and four-year life).

e. Total expenditures during 2004 for ordinary repairs and maintenance were $6,700.
/. On December 3 1 , 2004, paid $8,000 for a complete reconditioning of Machine B acquired on January 1, 2001. Original cost, $18,000; accumulated depreciation (straight line) to December 31, 2003, $10,200 ($2,000 residual value and four-year life).
Required: 1. For each of these transactions, indicate the accounts, amounts, and effects (+ for increase and —

for decrease) on the accounting equation. Use the following structure: 2. For each of these assets, compute depreciation and amortization to the nearest month to be recorded at the end of the year on December 3 1 , 2004.

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Date Assets Liabilities Stockholders' Equity