Question

E8-6 (Static) Recording Depreciation and Repairs (Straight-Line Depreciation) LO8-2, 8-3

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Manrow Growers, Incorporated, owns equipment for sowing and harvesting its organic fruit, vegetables, and tree nuts that are sold to local restaurants and grocery stores. At the beginning of this year, an asset account for the company showed the following balances:


Equipment $ 350,000

Accumulated depreciation through the end of last year 165,000

During the current year, the following expenditures were incurred for the equipment:


Major overhaul of the equipment on January 1 of the current year that improved efficiency $ 42,000

Routine maintenance and repairs on the equipment 5,000

The equipment is being depreciated on a straight-line basis over an estimated life of eight years with a $20,000 estimated residual value. The annual accounting period ends on December 31.


1. Record the expenditure for the major overhaul of the equipment.

(debit and Credit)

2. Record the expenditure for routine maintenance and repairs on the equipment.

(debit and credit)

3. Starting at the beginning of the current year, what is the remaining estimated life?
Remaining "X" life

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