![M9-3 Deciding Whether to Capitalize or Expense [LO 9-2, LO 9-6] For each of the following items, select whether the cost shou](http://img.homeworklib.com/questions/174e1570-35dd-11ea-ac9a-e57ed766691d.png?x-oss-process=image/resize,w_560)
Homework Answers
Cost either capitalized or expensed-
1. Purchased a machine $70,000, gave long term note: capitalized
2. Paid $600 for ordinary repairs: Expensed
3. Purchased a patent $45,300 cash: Capitalized
4. Paid cash $200,000 for addition to old building: Capitalized
5. Paid $20,000 for monthly salaries: Expensed
6. Paid $250 for routine maintenance: Expensed
7. Paid $16,000 for extraordinary repairs: Capitalized
Note - Capitalized means cost included in the value of asset for a period of time. Expensed related to the amount which will be charged to expense account and reduces the profit.
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