How Should $45,000 Spent to Obtain Greater Productive Efficiency for a Machine

question 100

Multiple Choice

How should $45,000 spent to obtain greater productive efficiency for a machine with a carrying value of $80,000 be accounted for?

• A)Capitalized, then depreciated during current and subsequent periods.
• B)Expensed in the period in which the cost occurs.
• C)Charged to accumulated depreciation with no change in the depreciation rate.
• D)Charged to retained earnings.

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