A wood processing company purchases a new machine for its factory at a significant cost. This equipment has an expected useful life of $10$ years and per tax rules cannot be expensed in the yea

when it is purchased. How will the cost to the company of this piece of equipment be recorded?

A$.$ It will be depreciated over time on the income statement and subtracted as Inventory on the statement of cash flows.

B$.$ It will be depreciated over time on the income statement and therefore not be recorded separately on the statement of cash flows.

C$.$ It will be subtracted from Gross Profit on the income statement and therefore, not be recorded separately on the statement of cash flows.

D$.$ It will be depreciated over time on the income statement and subtracted as a capital expenditure on the statement of cash flows.