Patriot Corporation purchased manufacturing equipment with an expected useful life of five years. The purchase of the machinery would be shown as

Question

Quizplus · Accepted Answer

The purchase of the machinery is an investment in a long-term asset that is expected to provide benefits to the company for more than one year. Therefore, it should be recorded as an asset on the balance sheet under the appropriate category (property, plant, and equipment). It is not an expense that would be recorded on the income statement.

Patriot Corporation Purchased Manufacturing Equipment with an Expected Useful Life