Question

Maria is the manager of a facility that makes small appliances. The factory’s management has decided to rearrange and reinstall all of the facility’s manufacturing equipment in order to promote a faster, more efficient workflow. Maria knows the total cost for the rearrangement and reinstallation, but that is all the information she currently has available.
A) Given this situation, which of the following statements is accurate?
O Maria should capitalize the rearrangement and reinstallation cost as an asset to be amortized over future periods expected to benefit, but only if this cost is material in amount.
O Maria should capitalize the rearrangement and reinstallation cost as an asset to be amortized over future periods expected to benefit, but only if this cost is immaterial in amount.
O Maria should immediately expense the rearrangement and reinstallation cost, but only if she is able to determine the machinery's original installation cost.
O Maria should immediately expense the rearrangement and reinstallation cost, but only if she is able to determine both the machinery's original installation cost and its accumulated depreciation to date

Answer 1

Answer:

The "first" Statement is Correct.

Explanation:

Costs ought to be exploited if they rise the long run edges that are predictable to be conventional and quantity experienced is substantial. Therefore within the assumed case reorganizing and reinstalling all of the industrial plant producing instrumentation so as to push a quicker, additional economic progress will certainly growth the long run edges to be established from the outflow. Therefore this quantity are going to be cost and desires to be capitalized. The devaluation ought to be charged above the helpful lifetime of the quality. The complete outflow can't be charged to operating statement as expenditure since it'll be beside the value of bookkeeping of cost