#21) Assume Safe Runner Products, Inc. upurchsed converyor -belt machinery. Requ

Question

#21) Assume Safe Runner Products, Inc. upurchsed converyor -belt machinery.

Requirement

1. Classify each of the following expenditures as a capital expenditure or an immediate expense related to machinery.

Expenditure                                                                                                           Classification

a) Purchase Price                                                                                                   Capital Expenditure or Expense

b) Transportation and insurance while machinery is in transit

from seller to buyer

c) Sales tax paid on the purcahse price

Explanation / Answer

xpenditure                                                                                                           Classification

a) Purchase Price                                                                                                   Capital Expenditure

b) Transportation and insurance while machinery is in transit Revenue Expenditure

from seller to buyer

c) Sales tax paid on the purcahse price   Revenue Expenditure

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