Question: An improvement made to an existing machine improved its functionality, increased its fair market value and its production capacity by 30 per cent and extended

An improvement made to an existing machine improved its functionality, increased its fair market value and its production capacity by 30 per cent and extended the machine's useful life by 5 years. How should the cost of the improvements be accounted for? Multiple Choice Recorded as an increase in accumulated amortization Recorded as a decrease to retained earnings None of the other alternatives are correct Expensed on the income statement Capitalized on the balance sheet

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