A manufacturer of plastic bottles for the medical trade purchases a new compression blow molder for its bottle production plant. How will the cost to the company of this piece of equipment be recorded?
◦ It will be depreciated over time on the income statement and subtracted as Inventory on the statement of cash flows.
◦ It will be depreciated over time on the income statement and subtracted as a capital expenditure on the statement of cash flows.
◦ It will be depreciated over time on the income statement and therefore not be recorded separately on the statement of cash flows.
◦ It will be subtracted from Gross Profit on the income statement and therefore not be recorded separately on the statement of cash flows.