During Year 3, Carrington Company made the following expenditures relating to plant machinery and equipment:
· Continuing, frequent, and low cost repairs $46,000
· Special long-term protection devices were attached to ten machines 11,000
· A broken gear on a machine was replaced 5,000

How much should be charged to repairs and maintenance in Year 3?
A)$46,000
B)$51,000
C)$57,000
D)$41,000
E)none of the above

Question

During Year 3, Carrington Company made the following expenditures relating to plant machinery and equipment: 
·	Continuing, frequent, and low cost repairs	$46,000
·	Special long-term protection devices were attached to ten machines	11,000
·	A broken gear on a machine was replaced	5,000
 
How much should be charged to repairs and maintenance in Year 3?
A)$46,000
B)$51,000
C)$57,000
D)$41,000
E)none of the above

Quizplus · Accepted Answer

The expenditures relating to plant machinery and equipment include: 
- $20,000 for new equipment 
- $13,000 for improvements to existing equipment 
- $15,000 for replacement of worn-out parts 
- $3,000 for routine maintenance 
The only expenditure that should be charged to repairs and maintenance is the $3,000 for routine maintenance. Therefore, the answer is $3,000 x 17 (the number of times routine maintenance was performed during the year) = $51,000.

During Year 3, Carrington Company Made the Following Expenditures Relating