On January 1, Year 2, Webb Construction Company overhauled four cranes resulting in a slight...

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On January 1, Year 2, Webb Construction Company overhauled four cranes resulting in a slight increase in the life of the cranes. Such overhauls occur regularly at fwo-year intervals and have been treated as malntenance expense in the past. Management is considering whether to capitalize this year's $20,620 cash cost in the Cranes asset account or to expense it as a maintenance expense. Assume that the cranes have a remaining useful life of two years and no expected salvage value. Assume straight-line depreciation. Required a. Determine the amount of additional depreciation expense Webb would recognize in Year 2 and Year 3 if the cost were capitalized in the Cranes account. b. Determine the amount of expense Webb would recognize in Year 2 and Year 3 if the cost were recognized as maintenance expense. c. Determine the effect of the overhaul on cash flow from operating activitios for Year 2 and Year 3 If the cost were capitallzed and expensed through depreciation charges. Note: Cash outflows should be indicated with a minus sigl d. Determine the effect of the overhaul on cash flow from operating activities for Year 2 and Year 3 if the cost were recognized as maintenance expense. Note: Cash outflows shouid be indicated with a minus sign

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