One of Crossler Inc.'s production machine was repaired for $75,000. Instead of expensing this amount, Crossler Inc. capitalized the $75,000 (i.e., added the $75,000 to the machine's book value). What is the effect on the financial statements as a result of the capitalization?

		Assets are understated and no impact on net income.
		Assets are overstated and net income is overstated.
		The financial statements are not affected.Assets are understated and net income is overstated.
		Assets are overstated and no impact on net income.
		Assets and stockholders' equity are both understated.