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A company buys a large truck for $176,000 that should last for 8 years. After 5...

A company buys a large truck for $176,000 that should last for 8 years. After 5 years, the company spends another $27,000 on this truck for the sole purpose of extending its life by 3 additional years. How is this $27,000 expenditure recorded?

A   As a decrease to accumulated depreciation
B   As an increase to the truck account
C   As an increase to maintenance expense
D   As an increase to repair expense

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Answer #1

Answer-The correct option is B-As an increase to the truck amount.

Explanation:-

Assets repairs or purchase of parts which increase usefulness and efficiency of the asset can be capitalized.

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