BUt reduces end acc de residual value to $0 e 8 Exp enditures after acquisition

Question

BUt reduces end acc de residual value to $0 e 8 Exp enditures after acquisition LO2 Tiger Logistics acquired a new truck for $75000 in end of 2011, accumulated depreciation on te tA h 2008. Au the truck was e service On 1 January 2012, Tiger paid $2000 for rouiw 250 truck and $8000 to overhaul the engine. hon the anticipated to extend the useful life of the truck by fve Required Calculate the net book value of Tiger's truck immediatel the service and overhaul. The gine work is 9 Capital/revenue expenditures LO3 A company incurs the following expenditures related to currently owned non-current assets: annual pressure washing of building, $5000P new engine in delivery truck, $4500 repair of water damage caused by leaking roof, $3500 new tyres on tractor, $2000 E addition of 1000 square feet of office space, $22000 CE " modifications to machinery to improve efficiency,$7200.C Required Identify each expenditure as a capital or revenue expen and explain why the accountant should classify the expe as an'expense' or 'asset' enditure 10 Impairment entry 10 Jenford 3

Explanation / Answer

Purchase of New Truck in 2008 $75,000 Less : Accumulated depreciation -25000 Net Value of Truck $50,000 Add : Overhaul 8000 Value of Truck $58,000 Less : Depreciation for 2012(58000/5) 11600 Net Book Value $46,400 Routine service are annual charges and would be expense in the income statement

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