An Improvement Made to a Machine Increased Its Fair Value

question 88

Multiple Choice

An improvement made to a machine increased its fair value and its production capacity by 25% without extending the machine's useful life. The cost of the improvement should be

• A) expensed.
• B) debited to accumulated depreciation.
• C) capitalized in the machine account.
• D) allocated between accumulated depreciation and the machine account.

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Definitions:

IR

Infrared spectroscopy, a technique used to identify and study chemicals through the interaction of infrared radiation with molecular vibrations.

Singlet

A state in which all electrons in an atom or molecule are paired, resulting in no net spin.

Ppm

Short for parts per million, a unit of measurement used to denote the concentration of a substance in a solution or mixture.

NMR Spectrum

A representation that displays the different environments of hydrogen or carbon atoms in a compound as a result of nuclear magnetic resonance spectroscopy.