Ch 9 Indicate which of the following should be expensed when incurred

Question 1

$13,000 paid to rearrange and reinstall machinery

Answer 1

capitalized

Question 2

$200,000 paid for addition to building

Answer 2

capitalized

Question 3

$200 paid for tune-up and oil change on delivery truck

Answer 3

expensed

Question 4

$7,000 paid to replace a wooden floor with a concrete floor

Answer 4

capitalized

Question 5

$2,000 paid for a major overhaul on a truck, which extends the useful life

Answer 5

capitalized

Question 6

improvement

Answer 6

capitalized

Question 7

replacement of a minor broken part on a machine

Answer 7

expenses

Question 8

expenditure that increases the useful life of an existing asset

Answer 8

capitalized

Question 9

expenditure that increases the efficiency and effectiveness of a productive asset but does not increase its salvage value

Answer 9

capitalized

Question 10

expenditure that increases the efficiency and effectiveness of a productive asset and increases the asset’s salvage value

Answer 10

capitalized

Question 11

expenditure that increases the quality of the output of the productive asset

Answer 11

capitalized

Question 12

improvement to a machine that increased its fair market value and its production capacity by 30% without extending the machine’s useful life

Answer 12

capitalized

Question 13

ordinary repairs

Answer 13

expensed