Exeter Corporation Purchased a Piece of Equipment with a Price

question 90

Multiple Choice

Exeter Corporation purchased a piece of equipment with a price of $80,000 on March 1, 2018.The amounts below are related to the equipment purchase.Match the items below and explain why each revenue expenditure is not capitalized.
-During the installation, the equipment was damaged and repair costs of $2,000 were incurred.

• A)This item should be included as part of the cost of the equipment.
• B)This item should be considered a revenue expenditure.

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