Redline Publishers, Inc. produces various manuals ranging from computer software instructional booklets to manuals explaining the installation and use of large pieces of industrial equipment. At the end of sold, the companv's balance sheet reported total assets r of $52 million and total Iiabilies of Sao million. The income statement for 11315 reported net income of $1.1 million, whid'l represents an approio'ruate 3% increase From the prior vear. The companv's e'ective income tax rate is 3o%. Near the end of solo, a varietv of expenditures were made to overhaul the company's manufacturing equipment. None of these expenditures exceeded 57'5o, the materialitv threshold the company has set for the capitalization of any such expenditure. Even though the overhauls extended the service life of the equipment, the expenditures were expensed, not capitalised. Iohn Henderson, the company's controller, is worried about the treatment of the overhaul expenditures. Even though no individual expenditure exceeded the Ego materialityr threshold, total expenditures Twere $vo,ooo. Required: Should the overhaul expenditures be capitalized or expensed'i