On September 10, 2020, Angola Printing incurred the following costs for one of its printing presses: Purchase of stapling attachment.............................................................$84,000
Installation of attachment........................................................................10,000
Replacement parts for renovation of presz......................................... $\quad 36,000$
Labour and overhead in connection with renovation of presc ............ $\quad 14,000$ 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?
A) $ 0
B) $ 108,000
C) $ 130,000
D) $ 144,000

Question

Quizplus · Accepted Answer

The costs that should be capitalized include the purchase of the stapling attachment ($84,000), the installation of the attachment ($10,000), the replacement parts for the renovation of the press ($36,000), and the labor and overhead in connection with the renovation ($14,000). These costs all directly contribute to preparing the asset for its intended use, improving its efficiency or productivity, even though they do not extend its useful life. Therefore, the total capitalized cost is $144,000.

On September 10, 2020, Angola Printing Incurred the Following Costs 36,000\quad 36,00036,000

On September 10, 2020, Angola Printing Incurred the Following Costs $\quad 36,000$