During year 1, Yvo Corp. installed a production assembly line to manufacture furniture. In year 2, Yvo purchased a new machine and rearranged the assembly line to install this machine. The rearrangement did not increase the estimated useful life of the assembly line, but it did result in significantly more efficient production. The following expenditures were incurred in connection with this project: Machine Labor to install machine Parts added in rearranging the assembly line to provide future benefits Labor and overhead to rearrange the assembly line What amount of the above expenditures should be capitalized in year 2? $107.000 $89,000 $147,000 $75,000 14,000 40,000 18,000

During year 1, Yvo Corp. installed a production assembly line to manufacture furniture. In year 2, Yvo purchased a new machine and rearranged the assembly line to install this machine. The rearrangement did not increase the estimated useful life of the assembly line, but it did result in significantly more efficient production. The following expenditures were incurred in connection with this project: Machine Labor to install machine Parts added in rearranging the assembly line to provide future benefits Labor and overhead to rearrange the assembly line What amount of the above expenditures should be capitalized in year 2? $107.000 $89,000 $147,000 $75,000 14,000 40,000 18,000

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 4PA: During the current year, Arkells Inc. made the following expenditures relating to plant machinery. ...

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During the current year, Arkells Inc. made the following expenditures relating to plant machinery. Renovated five machines for $100,000 to improve efficiency in production of their remaining useful life of five years Low-cost repairs throughout the year totaled $70,000 Replaced a broken gear on a machine for $10,000 A. What amount should be expensed during the period? B. What amount should be capitalized during the period?
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