Riley Holdings Corp. incurred the following expenditures: $3.800 cost to replace

Question

Riley Holdings Corp. incurred the following expenditures: $3.800 cost to replace the transmission in a company-owned vehicle; $17,100 cost of annual property insurance on the company s production facilities: $14,500 cost to develop and register a design patent. $62,900 cost to add a security and monitoring system to the company's distribution center. $1,100 cost to repair paint damage on a company-owned vehicle caused by normal wear and tear Which of these expenditures should he capitalized? (Select all that apply.) $3,800 $14,500 $62,900 $17,100 $1100

Explanation / Answer

Solution:

Capitalized Expenditure:

An amount spent to acquire or upgrade productive assets (such as buildings, machinery and equipment, vehicles) in order to increase the capacity or efficiency of a company for more than one accounting period is called as capitalized expenditure.

So, the below expenditures should be capitalized:

1) Cost to replace the transmission in a company-owned vehicle - 3,800

2) Cost to develop and register a design patent - 14,500

3) Cost to add a security and monitoring system to the company’s distribution center - 62,900

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.