Question

Demmert Manufacturing incurred the following expenditures during the current fiscal year: annual maintenance on its equipment, $5,600; remodeling of offices, $22,200; rearrangement of the shipping and receiving area resulting in an increase in productivity, $35,200; addition of a security system to the manufacturing facility, $25,200.How should Demmert account for each of these expenditures

Answer 1

Answer and Explanation:

The description is as follows:

The annual maintenance for an equipment is $5,600 it would be classified as a normal repairs & maintenance and the same would be expensed

The remodeling of office for $22,200 would be classified as an improvement. The same would be capitalized & depreciated

The rearrangement of the shipping & receiving area for $35,200 would be classified as a rearrangement and The same would be capitalized & depreciated

The addition for $25,200 would be classified as an addition and The same would be capitalized & depreciated