I-11.01 Problem

I-11.01 Problem - I-11.01 Tidwell Corporation's accounting...

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I-11.01 Tidwell Corporation's accounting staff was unsure how to account for certain expenditures relating to its property, plant, and equipment. As a result, the company has delayed recording entries related to the following transactions. In addition, until these items are resolved, the determination of depreciation expense for the year has been delayed. Item A The company's delivery truck, originally costing $90,000 and having a 6-year life with no salvage value, was substantially overhauled at a cost of $10,000. This expenditure occurred at the beginning of the year, when the truck was two years old. This action restored the truck to "like-new" condition, and extended the useful life by an additional three years. Item B At mid-year, the company added a new $65,000 dust handling unit to the heating and ventilation system in its inventory warehouse. This new feature is supposed to reduce dust from the air and provide for a cleaner environment in which to store inventory. The new dust unit has a 10-year physical life, but it is anticipated that it
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This note was uploaded on 02/29/2012 for the course ACCOUNTING 101 taught by Professor Hudack during the Spring '11 term at FIU.

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