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15 June, 18:40

Indicate which of the following costs should be expensed when incurred. (a) $13,000 paid to rearrange and reinstall machinery. select an option (b) $200,000 paid for addition to building. select an option (c) $200 paid for tune-up and oil change on delivery truck. select an option (d) $7,000 paid to replace a wooden floor with a concrete floor. select an option (e) $2,000 paid for a major overhaul on a truck, which extends the useful life.

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  1. 15 June, 18:41
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    A, B, D, E are cost which should NOT be expensed when incurred. While C is a cost which should BE expensed when incurred.

    Explanation:

    (a) $13,000 paid to rearrange and reinstall machinery. select an option. NO

    (b) $200,000 paid for addition to building. select an option. NO

    (c) $200 paid for tune-up and oil change on delivery truck. select an option. YES

    (d) $7,000 paid to replace a wooden floor with a concrete floor. select an option. NO

    (e) $2,000 paid for a major overhaul on a truck, which extends the useful life. NO

    Therefore A, B, D, E are cost which should NOT be expensed when incurred. While C is a cost which should BE expensed when incurred.
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