The cost of a major overhaul of a machine that extends its total useful life by four years would be:

Question

Quizplus · Accepted Answer

The cost of a major overhaul is considered to be a capital expenditure and should be added to the carrying amount of the asset. This will increase the future depreciation expense for the asset. The useful life of the asset has also been extended, so the depreciation should be recalculated over the remaining useful life of the asset.

The Cost of a Major Overhaul of a Machine That