ACC 304 All Assignments ACC 304 All Assignments | Page 159

b. expensed immediately if it merely improves the quality but does not
extend the useful life.
c. capitalized if it maintains the machine in normal operating
condition.
d. capitalized if it increases the quantity of units produced by the
machine.
S60. When a plant asset is disposed of, a gain or loss may result. The
gain or loss would be classified as an extraordinary item on the income
statement if it resulted from
a. an involuntary conversion and the conditions of the disposition are
unusual and infrequent in nature.
b. a sale prior to the completion of the estimated useful life of the
asset.
c. the sale of a fully depreciated asset.