the question asked is p$8-10,$

P$8-10.[$ASPE$]$ PPE capitalization$$betterments and repairs $($L$.$O$.8-1)($Medium $20$ minutes$)$

Refer to the situations in problem P$8-9.$ Using ASPE, prepare the necessary journal entries to record the transaction for each case. Please provide a short justification for your chosen treatment.

P$8-9.$ PPE capitalization$$replacements and repairs $($L$.$O$.8-1)($Medium $20$ minutes$)$

Below are several situations related to replacements and repairs. For each case, prepare the necessary journal entry to record the transaction. Please provide a short justification for your chosen treatment.

Case A:

Every three years a major component $($Part #$45)$ in a machine must be replaced. By doing this regular but expensive repair the machine can be used for $15$ years. If Part #$45$ were not replaced, the machine could be used only for a maximum of six years. When the machine was originally purchased for $$9,000,000$ it was set up as one asset and depreciated over its estimated useful life of $15$ years. Recently the repair was completed at a cost of $$750,000$ for Part #$45.$ The earlier Part #$45$ cost $$650,000$ when it was installed three years ago. Neither the old nor the new Part #$45$ has residual value.

Case B:

Same as Case A except Part #$45$ is recognized as a separate PPE asset and depreciated over three years.

Case C:

An important piece of equipment requires major maintenance. Management has decided to upgrade the machine in the process by installing a new component that will extend the useful life of the machine from three remaining years to five more years. The regular part could have been purchased for $$100,000$ but the more durable part cost $$175,000.$ The replaced part was not set up as a separate asset when the machine was purchased.

Case D:

A large piece of earth$-$moving equipment was upgraded at a cost of $$400,000$ so that it can self$-$unload. After the upgrade was completed, management estimated that this feature would save the company $$50,000$ a year for the next six years.

Case E:

A truck has a new engine installed for $$140,000$ that will increase gas mileage by $25\%$ and reduce pollution. The truck and engine were not set up as separate assets. Management confidently estimates that the cost of the engine is one$-$third of the overall cost of the truck. The truck$$s original cost was $$300,000$ and it is $40\%$ depreciated.

Case F:

A car rental company has a fleet of $40,000$ cars. Every three months all the cars are given scheduled oil changes, tire rotation, and replacement of small components. The cost per car is $$150,$ which is $$40$ in parts and $$110$ for the wages of in$-$house mechanics. This is $$6,000,000$ in total. For half of the cars, a satellite radio receiver was installed at a cost of $$75$ each $($total $$1,500,000).$ The gadget allows the car to receive satellite radio. The company will provide this service free and promote it heavily to increase sales. This advertising campaign will cost $$2,500,000.$ After the original free use of the satellite feature, the company will charge later users a fee for the use of satellite radio.