7) Fox Brothers purchased machinery. Classify each of the following amounts as s

Question

7) Fox Brothers purchased machinery. Classify each of the following amounts as something that should be capitalized or expensed a. purchase price of machinery b. sales tax on purchase of machinery c. shipping costs for machinery d. insurance on shipment of machinery e. installation of machinery f. training of employees for initial operation of machinery g. special reinforcement to machinery platform h. refinishing of machine before use to alter color (to match with company colors) i. depreciation on the machinery as it is used .major overhaul to extend the machinery's life by 3 years k. ordinary repairs to keep the machinery in good working order I. research and development to create new products to be manufactured on the machinery m. advertising of new products manufactured on the machinery n. renovations to the machinery adding new production capabilities

Explanation / Answer

Answer :

a. Purchase Price of Machinery : Capitalization

b. Sales tax paid on Purchase of Machinery : Capitalization

c. Shipping Cost of Machinery : Capitalization

d. Insurance on Shipment of Machinery : Capitalization

e. Installation of Machinery : Capitalization

f. Traning of Employees for Initial

Operation of Machinery : Capitalization

g. Special Reinformacement to Machinery Platform : Capitalization

h. Refinishing of Machine before use to Alter colors

(to match with company colors) : Expensed

i. Depreciation on the Macinery as it is used : Expensed

j. Major Overhaul to Extend the Machinery Life by 3 Years : Capitalization

k. Ordinary Repairs to keep the Machinery in good workig : Expensed

l. Reseach and Development ti create new Product to be

Manufactured on the Machinery : Expensed

m. Adverrising if New Product manufactured on Machinery : Expensed

n. Renovations to the Machinery adding new Prod, Capabilities : Capitalization

Related Questions

Navigate

• Browse (All)
• Browse 7
• Subjects

---

---

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