During the 2005 annual accounting period, Terwilliger Company completed the following transactions:

a. On January 1, 2005. purchased a patent for $19,600 cash (estimated useful life, seven years).

b. On January 1. 2005. purchased the assets (not detailed) of another business for cash $60,000, including

$16,000 for goodwill. The company assumed no liabilities. Goodwill has an indefinite life.

c. On December 31, 2005, constructed a storage shed on land leased from S. Rhoades. The cost was

$10,800. The company uses straight-line depreciation. The lease will expire in three years.

d. Total expenditures during 2005 for ordinary repairs and maintenance were $4,800.

e. On December 31, 2005, sold Machine A for $6,000 cash. Original cost on January 1, 2001, was

$26,000; accumulated depreciation (straight line) to December 3 1 . 2004, $18,400 ($3,000 residual value and five-year useful life).

/. On December 3 1 . 2005, paid $7,000 for a complete reconditioning of Machine B acquired on January 1, 2001. Original cost, $32,000; accumulated depreciation (straight line) to December 31, 2004, $13,000 ($6,000 residual value and ten-year useful 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:

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Date Assets = Liabilities Stockholders' Equity 2. For each of these assets. compute depreciation and amortization to be recorded at the end of the year on December 31. 2005.