What costs are capitalized when a machine is purchased according to the chapter on Long-Lived Assets?

When a machine is purchased, the costs that can be capitalized include all expenditures necessary to prepare the machine for its intended use. This typically includes the purchase price, transportation costs, installation fees, and any other costs directly related to making the asset operational.

The capitalized costs for a purchased machine consist of all expenses that are necessary to get the machine ready for use. This includes the initial purchase price, costs associated with transporting the machine, installation expenses, and any other direct costs incurred to prepare the machine for its intended function. However, costs such as training staff to use the machine are not capitalized and should be expensed instead.