Choose the correct answer and explain in one sentence why:
Problem 1. Expenditures capitalized as long-lived assets generally include those expenditures that:
a. are for items that have a physical life of more than a year, regardless of their cost.
b. are material and that have an economic benefit to the entity that extends beyond the current year.
c. are made for normal repairs to maintain the usefulness of the asset over a number of years.
d. are material and that have an economic benefit to the entity only in the current year.
Problem 2. When a depreciable asset is sold:
a. depreciation expense is adjusted so there is no gain or loss.
b. a loss arises if the sales proceeds exceed the net book value.
c. a gain arises if the sales proceeds exceed the net book value.
d. any cash received results in a gain.