Betterment versus Maintenance Expenditures

During the year, Graham International made the following expenditures relating to plant, machinery, and equipment:

• Completed regularly scheduled repairs at a cost of $150,000.
• Overhauled several stamping machines at a cost of $400,000 to improve production efficiency.
• Replaced a broken cooling pump on a 100-ton press at a cost of $15,000.

Required

Identify which expenditures should be expensed as a maintenance expense or capitalized as a betterment outlay.

Total amount charged as maintenance expense for the year: $Answer

Total amount charged as betterment outlays for the year: $Answer

Betterment versus Maintenance Expenditures

During the year, Graham International made the following expenditures relating to plant, machinery, and equipment:

• Completed regularly scheduled repairs at a cost of $150,000.
• Overhauled several stamping machines at a cost of $400,000 to improve production efficiency.
• Replaced a broken cooling pump on a 100-ton press at a cost of $15,000.

Required

Identify which expenditures should be expensed as a maintenance expense or capitalized as a betterment outlay.

Total amount charged as maintenance expense for the year: $Answer

Total amount charged as betterment outlays for the year: $Answer