Consider the following transactions for Company. Indicate whether the cost will be capitalized (added to assets) or
Question:
Consider the following transactions for Company.
Indicate whether the cost will be capitalized (added to assets) or expensed by Company.
- Company paid $150,000 in wages for research and development on a process it hopes to patent in another year.
- Company paid $10,000 to have new equipment transported to its business location where the equipment is being installed.
- Company pays $100,000 of interest for the current year on a note borrowed to finance the purchase of a small office building. The building was constructed about 5 years before Company's purchase.
- Company pays $8,000 to replace a broken part on equipment in the factory. This puts the equipment back into normal operating condition, but does not extend the life of the equipment.
Advanced Accounting
ISBN: 978-1934319307
2nd edition
Authors: Susan S. Hamlen, Ronald J. Huefner, James A. Largay III