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Sellers Construction Company purchased a compressor for $102,400 cash. It had an estimated useful life of four years and a $9,800 salvage value. At the beginning of the third year of use, the company spent an additional $8,190 related to the equipment. The company's financial condition just prior to this expenditure is shown in the following statements model: Balance Sheet Assets Cash + 12,310 + Book Value of Compressor 56,100 Stockholders' Equity Retained • Common Stock + Earnings 22,400 46,010 Income Statement Statement of Revenue + NA Expense NA = Net Income Cash Flows NA NA Required Record the $8,190 expenditure in the statements model under each of the following independent assumptions: Note: In the Statement of Cash Flows column, use the initials "OA" for operating activities, "FA" for financing activities, and "IA" for investing activity. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input. a. The expenditure was for routine maintenance. b. The expenditure extended the compressor's life. c. The expenditure improved the compressor's operating capacity. Sellers Construction Company a. b. C Horizontal Statements Model Balance Sheet Income Statement Assets Stockholders' Equity Statement of Cash Net Cash + Book Value of Compressor Common Stock Retained Earnings Revenue Expenses Flows Income 12,310 + 56,100 = 22,400 + 46,010 + = = + ++

Sellers Construction Company purchased a compressor for $102,400 cash. It had an estimated useful life of four years and a $9,800 salvage value. At the beginning of the third year of use, the company spent an additional $8,190 related to the equipment. The company's financial condition just prior to this expenditure is shown in the following statements model: Balance Sheet Assets Cash + 12,310 + Book Value of Compressor 56,100 Stockholders' Equity Retained • Common Stock + Earnings 22,400 46,010 Income Statement Statement of Revenue + NA Expense NA = Net Income Cash Flows NA NA Required Record the $8,190 expenditure in the statements model under each of the following independent assumptions: Note: In the Statement of Cash Flows column, use the initials "OA" for operating activities, "FA" for financing activities, and "IA" for investing activity. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input. a. The expenditure was for routine maintenance. b. The expenditure extended the compressor's life. c. The expenditure improved the compressor's operating capacity. Sellers Construction Company a. b. C Horizontal Statements Model Balance Sheet Income Statement Assets Stockholders' Equity Statement of Cash Net Cash + Book Value of Compressor Common Stock Retained Earnings Revenue Expenses Flows Income 12,310 + 56,100 = 22,400 + 46,010 + = = + ++

Excel Applications for Accounting Principles
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
ChapterMB: Model-building Problems
Section: Chapter Questions
Problem 14M
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am. 102.

Sellers Construction Company purchased a compressor for $102,400 cash. It had an estimated useful life of four years and a $9,800 salvage value. At the beginning of the third year of use, the company spent an additional $8,190 related to the equipment. The company's financial condition just prior to this expenditure is shown in the following statements model: Balance Sheet Assets Cash + 12,310 + Book Value of Compressor 56,100 Stockholders' Equity Retained • Common Stock + Earnings 22,400 46,010 Income Statement Statement of Revenue + NA Expense NA = Net Income Cash Flows NA NA Required Record the $8,190 expenditure in the statements model under each of the following independent assumptions: Note: In the Statement of Cash Flows column, use the initials "OA" for operating activities, "FA" for financing activities, and "IA" for investing activity. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input. a. The expenditure was for routine maintenance. b. The expenditure extended the compressor's life. c. The expenditure improved the compressor's operating capacity. Sellers Construction Company a. b. C Horizontal Statements Model Balance Sheet Income Statement Assets Stockholders' Equity Statement of Cash Net Cash + Book Value of Compressor Common Stock Retained Earnings Revenue Expenses Flows Income 12,310 + 56,100 = 22,400 + 46,010 + = = + ++
Transcribed Image Text:Sellers Construction Company purchased a compressor for $102,400 cash. It had an estimated useful life of four years and a $9,800 salvage value. At the beginning of the third year of use, the company spent an additional $8,190 related to the equipment. The company's financial condition just prior to this expenditure is shown in the following statements model: Balance Sheet Assets Cash + 12,310 + Book Value of Compressor 56,100 Stockholders' Equity Retained • Common Stock + Earnings 22,400 46,010 Income Statement Statement of Revenue + NA Expense NA = Net Income Cash Flows NA NA Required Record the $8,190 expenditure in the statements model under each of the following independent assumptions: Note: In the Statement of Cash Flows column, use the initials "OA" for operating activities, "FA" for financing activities, and "IA" for investing activity. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input. a. The expenditure was for routine maintenance. b. The expenditure extended the compressor's life. c. The expenditure improved the compressor's operating capacity. Sellers Construction Company a. b. C Horizontal Statements Model Balance Sheet Income Statement Assets Stockholders' Equity Statement of Cash Net Cash + Book Value of Compressor Common Stock Retained Earnings Revenue Expenses Flows Income 12,310 + 56,100 = 22,400 + 46,010 + = = + ++
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