On September 10, 2007, Flint Co.incurred the following costs for one of its printing presses: $\begin{array}{lr}
\text { Purchase of attachment } & \$ 55,000 \
\text { Installation of attachment } & 5,000 \
\text { Replacement parts for renovation of press } & 18,000 \
\text { Labor and overhead in connection with renovation of press } & 7,000
\end{array}$

Neither the attachment nor the renovation increased the estimated useful life of the press.However, the renovation resulted in significantly increased productivity.What amount of the costs should be capitalized?

Question

On September 10, 2007, Flint Co.incurred the following costs for one of its printing presses: $\begin{array}{lr}
\text { Purchase of attachment } & \$ 55,000 \
\text { Installation of attachment } & 5,000 \
\text { Replacement parts for renovation of press } & 18,000 \
\text { Labor and overhead in connection with renovation of press } & 7,000
\end{array}$

Neither the attachment nor the renovation increased the estimated useful life of the press.However, the renovation resulted in significantly increased productivity.What amount of the costs should be capitalized?

Quizplus · Accepted Answer

The costs of the attachment and its installation ($55,000 + $5,000) and the renovation costs ($18,000 + $7,000) should be capitalized because they enhance the productivity of the asset. Total capitalized cost is $85,000.

On September 10, 2007, Flint Co Neither the Attachment nor the Renovation Increased the Estimated Useful