capital expenditure or a revenue expenditure.
Q: How to calculate net present value with capital expenditures.
A: Capital expenditure refers to the amount incurred by the busi9ness in purchasing fixed assets for…
Q: Define the term capital expenditure.
A:
Q: Describe the Capital Expenditure process
A: Capital expenditure as the term suggest is a one time usually a balance sheet item. Usually a…
Q: Why is it necessary to make a distinction between Capital and Revenue Receipts and Capital and…
A: Capital receipts: These receipts are income that is earned from the investment and financing…
Q: Distinguish between economic and financial capital.
A: Capital resource: The equipment and goods that are being used for the purpose of generating other…
Q: What is a donated capital and how it is accounted?
A: Donated capital is defined as assets given as gift to the entity.
Q: hat does the term "miscellaneous expenditure" mean?
A: Miscellaneous Expenditure: These are the expenditure that are allowances for government services,…
Q: Define capital components
A: It is the discounted rate that has been calculated by the company on the basis of which present…
Q: What exactly is the analytic hierarchy process (AHP) and how can it be used to the process of making…
A: ANALYTIC HIERARCHY PROCESS: It is the method for managing and identifying, organizing the complex…
Q: the difference between capital expenditure and revenue expenditure.
A: Expenditure is defined as spending money on something. This can be a cash payment or the exchange of…
Q: Choice Are revenue expenditures.
A: Extraordinary repairs are repairs that are of high cost and increase the useful life of the asset…
Q: Define capital expenditure
A:
Q: Define the term net assets.
A: Net assets: The net assets are the difference between the total assets and the total liabilities of…
Q: Explain how capital budgeting handles a gain or loss on disposal
A: This question explains about capital budgeting handles a gain or loss on disposal:
Q: Describe the process of making Capital-Expenditure Decisions?
A: Capital Expenditure Decisions include those decisions which require deciding on the purchase of…
Q: Differentiate between a capital investment and an expense investment
A: Investment refers to the allocation of the funds in the assets in order to get returns. The…
Q: Explain why the cost of capital is measured on an after-tax basis why is use of a weighted average…
A: This question consists of two subquestions i.e. (a) Explain why the cost of capital is measured on…
Q: Define the term revenue expenditure.
A: Fixed Assets: It refers to the long-term assets having a useful life of more than a year which…
Q: What is the revenue project?
A: Revenue refers to the income generated by the company by performing certain operations or business…
Q: What is the difference between capital expenditure and revenue expenditure? Give an example of each.
A:
Q: Why should the capital expenditures be capitalized?
A: Capital Expenditures: Capital expenditures are those which provide future economic benefits by…
Q: Distinguish between the accounting for capital expenditures and revenue expenditures.
A: Fixed Assets: It refers to the long-term assets having a useful life of more than a year which is,…
Q: When does the Capital expenditures occur?
A: Capital expenditure is the money spent by business on acquiring fixed assets like land, building…
Q: What is the difference between capital expenditure and revenue expenditure?
A: Capital Expenditure: Expenses Incurred and the corresponding benefit out of such expenses lasts for…
Q: What is capital assets?
A: Capital asset means property of any kind like land, machinery, building, computer, vehicles,…
Q: When should the investment in working capital be treated as capital expenditure?
A: Working capital: It is the form of capital used by the business for day-to-day operations. Working…
Q: Net Income is a ( SOURCE / USE) of funds.
A: Net income is the amount of profit that is arrived by paying all expences from sales or revenue. In…
Q: Borrowing cost can be capitalized as cost of the assets when
A: Borrowing costs are costs related to amount borrowed or loans taken. This is the interest expense…
Q: Define how to record capital expenditure.
A: Capital expenditure: It refers to the amount spent on acquiring, maintaining, and improving the…
Q: Define revenue-producing assets.
A: Current assets: The assets which could be converted into cash within one year like accounts…
Q: Differentiate the Revenue Cycle and Expenditure cycle
A: The processes of the business are divided into different accounting cycles. The revenue cycle,…
Q: what is asset? what is gross profit?
A: Financial statements: These are the financial reports prepared by an organization for a financial…
Q: compare ordinary assets from capital assets
A: Ordinary Assets:- A per tax code Ordinary Assets are the assets which are held by the tax payer for…
Q: Classify Revenue or capital expenditure?
A: Introduction: Revenue Expenditure: Its a Recurring expenditure. Expenditure spent with in 12 months…
Q: What is a capital expenditure versus a revenue expenditure?
A:
Q: Distinguish between revenue and capital expenditures, and account for them.
A: Meaning of Expenditure Expenditure is the amount of various expenses incurred for the operations of…
Q: Explain, using practical example how Capital expenditure should be capitalized?
A: Capital expenditure can be defined as an expense made for the purchase of a long-term physical or…
Q: Which one of the following is a revenue expenditure?
A: Revenue expenditure: It refers to the amount spent on normal maintenance and repairs of fixed assets…
Q: Define the term Return on Total Assets? What does it measure?
A:
Q: income be affected
A: Operating income is the amount of revenue realized from the operations of the business, after…
Q: What is expenditure? explain types of expenditure?
A: Payments or liabilities incurred in exchange for goods or services are referred to as expenditures.…
Q: How are the sources of funds indicated?
A: firms can be evaluated using three financial statements: balance sheet income statement cashflow…
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- Capital and Revenue Expenditures Kimbrell Freight Lines Co. incurred the following costs related to trucks and vans used in operating its delivery service: Classify each of the costs as either a capital expenditure or a revenue expenditure. Choose a C for capital or an R for revenue in the box following the item. 1. Changed the oil and greased the joints of all the trucks and vans. 2. Installed a hydraulic lift to a van 3. Installed a new engine in a truck purchased three years ago 4. Repaired a flat tire on one of the vans 5. Installed a refrigeration unit on a truck to equip it to carry perishable goodsUS Freight Lines Co. incurred the following costs related to trucks and vans used in operating its delivery service:1. Installed GPS systems on the trucks.2. Replaced the transmission fluid on a truck that had been in service for the past four years.3. Overhauled the engine on one of the trucks purchased three years ago.4. Performed annual service of installing new spark plugs, changing the oil, and greasing the joints of all trucks and vans.5. Rebuilt the engine on one of the vans that had been driven 80,000 miles.6. Repaired a flat tire on one of the vans.7. Installed a hydraulic lift to a truck.8. Tinted the back and side windows of the vans and installed a security system to discourage theft of contents.9. Replaced a truck’s suspension system with a new suspension system, allowing for heavier loads.10. Installed an optional third-row seat on one of the vans.Classify each of the costs as a capital expenditure or a revenue expenditure.A Cost of a Fixed Asset Mist City Car Wash purchased a new brushless car-washing machine for one of its bays. The machine cost $41,700. Mist City borrowed the purchase price from its bank on a 1-year, 8% note payable. Mist City paid $975 to have the machine transported to its place of business and an additional $200 in shipping insurance. Mist City incurred the following costs as a part of the installation: During the testing process, one of the motors became defective when soap and water entered the motor because its cover had not been installed properly by Mist Citys employees. The motor was replaced at a cost of $640. Required: 1. Compute the cost of the car-washing machine. 2. CONCEPTUAL CONNECTION Explain why any costs were excluded from the cost of the machine.
- Betterment versus Maintenance Expenditures During the year, Graham International made the following expenditures relating to plant, machinery, and equipment: Completed regularly scheduled repairs at a cost of $300,000. Overhauled several stamping machines at a cost of $550,000 to improve production efficiency. Replaced a broken cooling pump on a 100-ton press at a cost of $30,000. Required Identify which expenditures should be expensed as a maintenance expense or capitalized as a betterment outlay. Total amount charged as maintenance expense for the year: $Answer Total amount charged as betterment outlays for the year: $AnswerCapital Expenditures and Revenue Expenditures Quality Move Company made the following expenditures on one of its delivery trucks: Mar. 20. Replaced the transmission at a cost of $4,855. June 11. Paid $1,740 for installation of a hydraulic lift. Nov. 30. Paid $64 to change the oil and air filter. Prepare the journal entries for each expenditure. If an amount box does not require an entry, leave it blank. Mar. 20 36 June 11 Nov. 30Sub Sandwiches of America made the following expenditures related to its restaurant: 1. Replaced the heating equipment at a cost of $250,000. 2. Covered the patio area with a clear plastic dome and enclosed it with glass for use during the winter months. The total cost of the project was $750,000. 3. Performed annual building maintenance at a cost of $24,000. 4. Paid for annual insurance for the facility at $8,800. 5. Built a new sign above the restaurant, putting the company name in bright neon lights, for $9,900. 6. Paved a gravel parking lot at a cost of $65,000. Required: Sub Sandwiches of America credits Cash for each of these expenditures. Indicate the account itdebits for each.
- A company purchased a special purpose machine on August 1st of the previous year. It was installed and ready to run on January 1st of the current year. The following costs were incurred in the purchase and installation of the machine: Invoice price $1,200,000 Freight costs 6,000 Installation costs 64,000 Electrical and power connections 32,000 Repairs to correct damage during uncrating 12,000 Costs to adjust machine to appropriate specifications 56,000 Costs of spare parts for future use 108,000 Sales tax 70,500 Cost of…Indicate which of the following costs should be expensed when incurred. a. $13,000 paid to rearrange and reinstall machinery. b. $200,000 paid for addition to building. c. $200 paid for tune-up and oil change on delivery truck. d. $7,000 paid to replace a wooden floor with a concrete floor. e. $2,000 paid for a major overhaul on a truck, which extends the useful life.Identify the following expenditures as capital expenditures or revenue expenditures. (a) Replacement of worn out gears on factory machinery. (b) Construction of a new wing on an office building. (c) Painting the exterior of a building. (d) Oil change on a company truck. (e) Replacing an old computer chip with a faster chip, which increases productive capacity. No extension of useful life expected. (f) Overhaul of a truck motor. One year extension in useful life is expected. (g) Purchased a wastebasket at a cost of $10. (h) Painting and lettering of a used truck upon acquisition of the truck.
- Identify the following expenditures as capital expenditures or revenue expenditures:a. Immediately after acquiring a new delivery truck, paid $195 to have the name of the store andother advertising material painted on the vehicle.b. Painted delivery truck at a cost of $450 after two years of use.c. Purchased new battery at a cost of $40 for two-year-old delivery truck.d. Installed an escalator at a cost of $17,500 in a three-story building that had been used for someyears without elevators or escalators.e. Purchased a pencil sharpener at a cost of $15.00. f. Original life of the delivery truck had been estimated at four years, and straight-line deprecia-tion of 25 percent yearly had been recognized. After three years’ use, however, it was decided to recondition the truck thoroughly, including adding a new engine.Cost of a Fixed Asset Mist City Car Wash purchased a new brushless car-washing machine for one of its bays. The machine cost $32,600. Mist City borrowed the purchase price from its bank on a 1-year, 12% note payable. Mist City paid $500 to have the machine transported to its place of business and an additional $200 in shipping insurance. Mist City incurred the following costs as a part of the installation: Plumbing Electrical Water (for testing the machine) Soap (for testing the machine) $2,700 1,640 35 18 During the testing process, one of the motors became defective when soap and water entered the motor because its cover had not been installed properly by Mist City's employees. The motor was replaced at a cost of $450. Required: Compute the cost of the car-washing machine.A company made the following expenditures in connection with the construction of a new building: Architect's fees 100,000 14,400,000 Cash paid for land and unusable building on the land Construction costs of new building 48,000,000 Construction survey 50,000 Excavation for basement construction 1,200,000 76,800 Freight on machinery purchased Installation of machinery Legal fees for title search Machinery purchased for operations Removal of old building Salvage from sale of old building materials 120,000 144,000 4,800,000 864,000 (192,000) Special base for the machinery 10,000 Answer the following: 1. How much should be recorded as cost of Land, Building and Machinery? 2. Assuming that the Building will be depreciated over 10 years with no salvage value, how much should be the annual depreciation expense? 3. Assume that the company will use unit-of production method for the depreciation of machinery. The estimated total production is 1000.000 units with the following production for the…