Question: A firm makes an improvement to a machine that increases the machine s fair value and boosts its production capacity by 3 0 % .

A firm makes an improvement to a machine that increases the machines fair value and boosts its production capacity by 30%. If this improvement does not extend the machines useful life, then how should the firm treat the related cost?
Select answer from the options below
1. It should expense the cost.
2. It should debit the cost to accumulated depreciation.
3. It should allocate the cost between accumulated depreciation and the machine account.
4. It should capitalize the cost in the machine account.

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