Potholes All along the sides of Route 10, residents displayed signs saying: County Executive: Fix this...

 

Transcribed Image Text:

Potholes All along the sides of Route 10, residents displayed signs saying: "“County Executive: Fix this Road!" Wanting to minimize the negative publicity associated with this sign campaign, the County Executive authorized a $1.8 million investment in upgrades to the road. How should the county account for these upgrades? Is the cost capital or expense? What other information may be required to evaluate this issue? The County Executive has asked your help in determining answers to the above questions. Draft a memo with your response using the correct guidance applicable to local governments. Potholes All along the sides of Route 10, residents displayed signs saying: "“County Executive: Fix this Road!" Wanting to minimize the negative publicity associated with this sign campaign, the County Executive authorized a $1.8 million investment in upgrades to the road. How should the county account for these upgrades? Is the cost capital or expense? What other information may be required to evaluate this issue? The County Executive has asked your help in determining answers to the above questions. Draft a memo with your response using the correct guidance applicable to local governments.

Answer rating: 100% (QA)

Solution The cost is an expense and is not capitalized The investment is a part of the co... View the full answer