paid $40,000 cash to replace a motor on equipment that extends its useful life by four years. paid $200 cash per truck for the cost of their annual tune-ups. paid $175 for the monthly cost of replacement filters on an air-conditioning system. completed an addition to a building for $225,000 cash. 1. classify the above transactions as either a revenue expenditure or a capital expenditure. 2. prepare the journal entries to record the four transactions from part 1.

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06-12-2022
Business

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paid $40,000 cash to replace a motor on equipment that extends its useful life by four years. paid $200 cash per truck for the cost of their annual tune-ups. paid $175 for the monthly cost of replacement filters on an air-conditioning system. completed an addition to a building for $225,000 cash. 1. classify the above transactions as either a revenue expenditure or a capital expenditure. 2. prepare the journal entries to record the four transactions from part 1.

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AarushiAanand AarushiAanand · Answer 1 · 2022-12-17T21:23:44+01:00

Paid $40,000 cash to replace a motor on equipment and addition to the building for $225,000 cash is a capital expenditure, whereas, $200 cash per truck and $175 for the monthly cost of replacement filters is a revenue expenditure.

Revenue expenditures ar short expenses employed in this amount or generally inside one year. Revenue expenditures embrace the expenses needed to fulfill the continuing operational prices of running a business, and therefore ar primarily identical as operative expenses (OPEX).

Capital expenditure (CapEx) is cash that's spent to accumulate, repair, update, or improve a set company quality, like a building, business, or instrumentation. A CapEx is totally different from an everyday business, that falls below the expense class.

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