Question

Question 4 (1 point) The replacement of a major component increased the productive capacity of production equipment from 10 units per hour to 18 units per hour. The expenditure should be debited to: Repairs expense. Maintenance expense. Equipment. Gain from repairs Question 5 (1 point) Depreciation. depletion, and amortization: All refer to the process of allocating the cost of long-term assets used in the business over future periods. All generally use the same methods of cost allocation Are all handled the same in arriving at taxable income. All of these answer choices are correct. Question 6 (1 point) Depreciation: is always considered a period cost. Could be a product cost or a period cost depending on the use of the asset. Is usually based on the declining-balance method. Per books is usually higher than MACRS in the early years of an asset's life. Question 7 (1 point) In computing capitalized interest, average accumulated expenditures: Is the arithmetic mean of all construction expenditures is determined by time-weighting individual expenditures made during the asset construction period. Is multiplied by the company's most recent financing rates. All of these answer choices are correct. Question 8 (1 point) Average accumulated expenditures: Is an approximation of the average debt a firm would have outstanding if it financed all construction through debt. Is computed as a simple average if all construction expenditures are made at the end of the period. Are irrelevant if the company's total outstanding debt is less than total costs of construction All of these answer choices are true statements.

Answer 1

4	Equipment
	Replacement increased the productive capacity.Hence,This should be capitalized into equipment account
	So,Other options are wrong
5	All refers to the process of allocating the cost of long-term assets used in the business over future periods
	They use different methods for cost allocation
	They are handled differently in arriving at taxable income
6	Could be a product cost or a period cost depending on the use of asset
	Depreciation can be computed using different methods including declining-balance method
	Other options are also not correct
7	is determined by time-weighting individual expenditures made during the asset construction period
	Other options are not correct
8	is an approximation of the average debt a firm would have outstanding if it financed all construction through debt
	Other options are not correct