Demmert Manufacturing incurred the following expenditures during the current fis

Question

Demmert Manufacturing incurred the following expenditures during the current fiscal year: annual maintenance on its machinery, $6,400; remodeling of offices, $23,000; rearrangement of the shipping and receiving area resulting in an increase in productivity, $36,000; addition of a security system to the manufacturing facility, $26,000 How should Demmert account for each of these expenditures? Expenditure Amount Classification Accounting treatment Annual maintenance on machinery Remodeling of offices Rearrangement of the shipping and receiving area Addition of a security system

Explanation / Answer

Solution :-

Particulars Amount ($) Classification Accounting Treatment Annual Maintenance on Machinery 6400 Normal Repair and Maintenance Expensed Remodeling of offices 23000 Improvement Capitalized and Depreciated Rearrangement of the hipping and Receiving Area 36000 Rearrangement Capitalized and Depreciated Addition of a Security System 26000 Addition Capitalized and Depreciated

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