Question
Seaweed Salvagers is a corporation engaged in producing foodstuffs from seaweed. Seaweeds primary salvaging plan is located in CA. Because salvaging technology hasnt changed through
Seaweed Salvagers is a corporation engaged in producing foodstuffs from seaweed. Seaweeds primary salvaging plan is located in CA. Because salvaging technology hasnt changed through the years, Seaweeds primary equipment was purchased in the early 1970s. At that time, the primary insulation material was asbestos which the OSHA has now deemed unsafe.
The company institutes an asbestos abatement program to comply with the new regulations and proceeds to replace the hazardous material with environmentally friendly material. The cost for each machine is $13,000. The annual repair and maintenance of the machine is $45,000 and the fair market value of the machine is $600,000.
How should Seaweed treat this expense?
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