Cost to repair damage to machine incurred when installing the machine should be:
A)capitalized
B)expensed immediately
C)capitalized once machine is in use.
D)expensed at the end of the life of the machine

Question

Quizplus · Accepted Answer

When damage is incurred during installation, it is related to the cost of getting the machine ready for its intended use. Therefore, the repair costs should be included in the cost of the machine and capitalized as a part of its acquisition cost. This will ensure that the asset is reported at its proper cost on the balance sheet, and the repair cost will be depreciated over the useful life of the machine.

Cost to Repair Damage to Machine Incurred When Installing the Machine