Chia Pet, Inc. owns a machine that it uses in its manufacturing process. Chia purchased the machine 4 years ago for $100,000. The depreciation on the machine for the first 4 years was calculated using the straight line method with no residual and a 5 year useful life. During the fifth year, Chia spends $10,000 in cash on an overhaul of the machine which was starting to wear out. Which of the following is true with regard to the overhaul?

Question 14 options:

1)	If the overhaul is determined to extend the useful life of the machine the $10,000 should be added to the machine account
2)	If the overhaul is determined to only fix the machine so that it will operated normally, then the $10,000 will increase expenses
3)	The recording of the overhaul will have no effect on the companys liabilities
4)	All of the above are true with regard to the overhaul