A | B | C | D | E | F | G | H | I | J |
2 | 1) | ||||||||
3 | As per IRS following are cases in which case expenditures can be capitalized. | ||||||||
4 | a) Fixing defect or flaw | ||||||||
5 | b) Enlargement or expansion | ||||||||
6 | c) Increasing capacity or efficiency. | ||||||||
7 | d) Rebuilding of property after the end of economic life | ||||||||
8 | e) Replacement of major component | ||||||||
9 | f) Adapt the property to different use | ||||||||
10 | |||||||||
11 | A) Replacing the old shingle roof with a new tile can be done to fix the defect. | ||||||||
12 | Thus it can be capitalized. | ||||||||
13 | |||||||||
14 | B) Changing one heating system to other may improve the efficiency. | ||||||||
15 | Thus it can be capitalized. | ||||||||
16 | |||||||||
17 | C) Replacing the old truck will improve the efficiency/ | ||||||||
18 | Thus it can be capitalized. | ||||||||
19 | |||||||||
20 | D) Cost of replacing the small tools donot fall in any of the above category. | ||||||||
21 | Hence it should not be capitalized. | ||||||||
22 | |||||||||
23 | Thus the option (D) is the correct answer. | ||||||||
24 | |||||||||
25 | |||||||||
26 |
(1).Which of the following expenditures incurred in the operation of a business is not required to...
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