Exeter Corporation Purchased a Piece of Equipment with a Price

question 80

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.
-It was necessary for an architect to redesign the work space to accommodate the new equipment.A fee of $6,000 was paid.

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