Case 4.1

You are a corporate accountant for a distribuTon company that provides distribuTon services to a large online retailer. Your company extensively uses conveyor belts to move shipping boxes and their contents through its warehouse. he seams in the companys conveyor belts have stated to jam periodically, at Tmes bringing the belts to a stop. he company has invested $100,000 to apply a special bonding agent to the belts seams so they wont jam anymore. By applying this bonding agent, the company can avoid replacing the belts to Fx this jamming issue. here is a chance that this bonding agent will also result in the belts useful lives being extended by a few years. Assume that a plant accountant has contacted you to ask whether the bonding agent should be recorded as an asset or an expense. Using guidance from the Conceptual ramework, analyze this issue and prepare an email response to the plant accountant.