Answer:
(1) NO As this maintenaince will be done in order to keep the current value It is an expenditure to avoid decay of the plant assets
(2) Yes it should be capitalizeds as increase the useful life of the assets (thus the depreciation will change as well as the useful years remaining increases
(3) Yes it should be. As increase the utility it will have a higher future positive cashflow in the future.
Explanation:
We are asked under which circumnstances the amont spend in the maintenance or overhaul should increase the plant asset account or be considered expense of the period.
The total interest due at the end of two months is computed by $480,000 * 0.08 * 2/12 = $6400
As the notes payable charge interest each month interest of $6400/2 = $3200 needs to be accrued. So the adjusting entry to be recorded is:
debit to interest expense 3200
credit to interest payable 3200
Answer:
Option C (perfectly elastic demand) seems to be the correct alternative.
Explanation:
- Large companies manufacture similar products which cannot be separated from those manufactured by certain rivals.
- Price increases become decided on the market as well as firm price changes, marketing their production at either the current market value. Increasing organizations face a relatively elastic consumer surplus equivalent to something like the sale value.
All other alternatives in question are not relevant to the unique scenario. But that's the correct answer above.
To maintain the same standard of living, the average family must spend more money.
