Question: Wizard, a high tech startup, purchased 500 ultra high-tech electronic pencils for each of its employees to use on their tablets. Each pencil costs $400

Wizard, a high tech startup, purchased 500 ultra high-tech electronic "pencils" for each of its employees to use on their tablets. Each pencil costs $400 and expects to have a useful life of 2 years. Wizard does not have AFS, but on its books, Wizard capitalizes and depreciates such amount. What statement is true about how Wizard should treat the $200,000 expenditure?

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Wizard should record the 200000 expenditure as an asset on its balance sheet and depreciate it over the useful life of the pencils 2 years Heres the reasoning Capitalization Since Wizard capitalizes t... View full answer

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