Refer to the information in E8-7.

Required:Indicate the effects (accounts, amounts, and + or ?) of the items below on the accounting equation. Use the following schedule:

1. The adjustment for depreciation at the end of 2019.

2. The two expenditures during 2020.

E8-7

Hulme Company operates a small manufacturing facility as a supplement to its regular service activities. At the beginning of 2020, an asset account for the company showed the following balances:

Manufacturing equipment ................................... $120,000Accumulated depreciation through 2019 ............... 57,600

During 2020, the following expenditures were incurred for the equipment:

The equipment is being depreciated on a straight-line basis over an estimated life of 15 years with a $12,000 estimated residual value. The annual accounting period ends on December 31.

Transcribed Image Text:

Stockholders' Equity Liabilities Date Assets Major overhaul of the equipment on January 2, 2020, that improved efficiency Routine maintenance and repairs on the equipment $13,000 1,000