Question
FFI purchased a used computer and a printer at an auction for $2,500. The printer needed a new drum. The cost of the new drum
FFI purchased a used computer and a printer at an auction for $2,500. The printer needed a new drum. The cost of the new drum was $500. The used computer's fair market value was $2,000 if purchased separately. The printer was worth $1,000 without a drum and $1,500 with the drum replaced. Require: Allocate the expenditure related to the used computer bundle to each component, and identify whether each component must be amortized, expensed or either (policy choice). Allocate amount of each component to appropriate column below:
| Capitalize | Expense | Policy Choice to capitalize or expense |
Computer |
|
| |
Printer |
|
|
|
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