Rich Company has purchased the following 3 fixed assets, scorekeeping equipment, machine and car:

1. On December 1^st ,2015, Rich Company installs automatic scorekeeping equipment with an invoice cost of $180,000. The electrical work required for the installation costs $8,000. Additional costs are $3,000 for delivery and $12,600 for sales tax. During the installation, a component of the equipment is carelessly left on a lane and hit by the automatic lane-cleaning machine. The cost of repairing the component is $2,250.

2. A machine was purchased on 1^st of January 2016 at a cost of $490,000. The cost of installation is $10,000. The estimated residual value of the machine at the end of its useful life is $50,000 and the service life of the asset is estimated to be 5 years. The company used the Double Declining Balance Method to calculate the depreciation expense during the useful life of the machine.

3. A car was purchased on January 1^st,2017 and was expected to be driven 150,000 miles. The car cost $39,500 and is expected to have a salvage value of $500. It was driven 30,000 miles in year 1 and 20,000 miles in year 2. The company uses the Units-of-Activity Method in computing depreciation on its car.

Which of the following is classified as capital expenditures?

a.

Paid $160 for the monthly cost of replacement filters on an air-conditioning system.

b.

Paid $50,000 cash to replace a compressor on a refrigeration system that extends its useful life.

c.

Paid $300 cash for the cost of the annual tune-ups to maintain the truck engine efficiency.

d.

All the given options.

To record the Depreciation Expense of the Car at the end of 2018, the company should:

a.

Increase Accumulated Depreciation with $13,000

b.

Credit accumulated depreciation with $7,800

c.

All the given options.

d.

Increase Depreciation Expense with $5,200