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Business, 27.11.2019 23:31 ashleyuchiha123

Plant assets often require expenditures subsequent to acquisition. it is important that they be accounted for properly. any errors will affect both the balance sheets and income statements for a number of years. for each of the following items, indicate whether the expenditure should be capitalized or expensed in the period incurred. items (a) improvement. (b) replacement of a minor broken part on a machine. (c) expenditure that increases the useful life of an existing asset. (d) expenditure that increases the efficiency and effectiveness of a productive asset but does not increase its salvage value. (e) expenditure that increases the efficiency and effectiveness of a productive asset and increases the asset’s salvage value. (f) expenditure that increases the quality of the output of the productive asset. (g) improvement to a machine that increased its fair market value and its production capacity by 30% without extending the machine’s useful life. (h) ordinary repairs.

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