Refer to the information in E9-4.
Data From E9-4.
Wiater Company operates a small manufacturing facility. On January 1, 2017, an asset account for the company showed the following balances:
Manufacturing equipment………………………$160,000
Accumulated depreciation through 2016…..110,000
During the first week of January 2017, the following expenditures were incurred for repairs and maintenance:
Routine maintenance and repairs on the equipment…………..21,000
Major overhaul of the equipment that improved efficiency……$ 1,850
The equipment is being depreciated on a straight-line basis over an estimated life of fifteen years with a $10,000 estimated residual value. The annual accounting period ends on December 31.
Required:
1. Give the adjusting journal entry that would have been made at the end of 2016 for depreciation on the manufacturing equipment.
2. Starting at the beginning of 2017, what is the remaining estimated life of the equipment?
3. Give the journal entries to record the two expenditures for repairs and maintenance during 2017.
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