1. Classify the following as either a revenue expenditure (RE) or a capital expe

Question

1. Classify the following as either a revenue expenditure (RE) or a capital expenditure (CE). Qs 8-8 a. Paid $40,000 cash to replace a compressor on a refrigeration system that extends is usefu lfe Rsvende and capital expenditures C3 by four years. b. Paid $200 cash per truck for the cost of their annual tune-ups. c. Paid $175 for the monthly cost of replacement filters on an air-conditioning system d. Completed an addition to an office building for $225,000 cash. 2. Prepare the journal entries to record transactions a and d of part 1

Explanation / Answer

a)Capital expenditure

b)Revenue expenditure

c)Revenue expenditure

d)Capital expenditure

2) equipment(db)40000

cash(cr)40000

truck expense(db)200

cash(cr)200

oher expense(db)175

cash(cR)175

building(db)225000

cash(cr)225000

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