. Paid $64,000 cash to replace a motor on equipment that extends its useful life by four years. . Paid $320 cash per truck for the cost of their annual tune-ups. . Paid $256 for the monthly cost of replacement filters on an air-conditioning system. 1. Completed an addition to a building for $360,000 cash. Classify the above transactions as either a revenue expenditure or a capital expenditure. . Prepare the journal entries to record the four transactions from part 1. Complete this question by entering your answers in the tabs below.

. Paid $64,000 cash to replace a motor on equipment that extends its useful life by four years. . Paid $320 cash per truck for the cost of their annual tune-ups. . Paid $256 for the monthly cost of replacement filters on an air-conditioning system. 1. Completed an addition to a building for $360,000 cash. Classify the above transactions as either a revenue expenditure or a capital expenditure. . Prepare the journal entries to record the four transactions from part 1. Complete this question by entering your answers in the tabs below.

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Description: a. Paid $64,000 cash to replace a motor on equipment that extends its useful life by four years.b. Paid $320 cash per truck for the cost of their annual tune-ups.c. Paid $256 for the monthly cost of replacement filters on an air-conditioning system.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 23P

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s a. Paid $40,000 cash to replace a motor on equipment that extends its useful life 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 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entries to record the four transactions from part 1. View transaction list View journal entry worksheet / No 1 WWW Transaction 4- Equipment 4+ 6 7 8 General Journal Next > 40,000 prt sc Credit Ⓒ ho
1. Classify the following as either a revenue expenditure (RE) or a capital expenditure (CE). a. Paid $40,000 cash to replace a motor on equipment that extends its useful life 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 a building for $225,000 cash. 2. Prepare the journal entries to record the four transactions from part 1.
Paid $78,000 cash to replace a motor on equipment that extends its useful life by four years. Paid $390 cash per truck for the cost of their annual tune-ups. Paid $312 for the monthly cost of replacement filters on an air-conditioning system. Completed an addition to a building for $438,750 cash. Classify the above transactions as either a revenue expenditure or a capital expenditure. Prepare the journal entries to record the four transactions from part 1.
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.
Some of the following items should be treated as capital and some as revenue. Carriage paid to bring the purchased machinery to the works. Complete redecoration of the premises at a cost of Kshs.150,000. A quarterly account for heating. The purchase of a soft drinks vending machine for the canteen with a stock of soft drinks. Wages paid by a building contractor to his own workmen for the erection of an office in the builder's stockyard. Required: For each item, give an appropriate classification. Give justification for each classification.
For each of the following items, enter the correct letter to show whether the expenditure should becapitalized (C) or expensed (E).Transactions1. Purchased a machine, $70,000; gave long-term note.2. Paid $600 for ordinary repairs.3. Purchased a patent, $45,300 cash.4. Paid cash, $200,000, for addition to old building.5. Paid $20,000 for monthly salaries.6. Paid $250 for routine maintenance.7. Paid $16,000 for extraordinary repairs.
On January 1, 20x1, POLICE POWER Co. received cash of P8,000,000 from a local government to be used in constructing a building. The construction was completed on December 31, 20x1 for a total cost of P20,000,000. The building will be depreciated using the straight line method over 20 years. Requirements: a. Provide the journal entries in 20x1 to 20x3 using (i) gross presentation and (ii) net presentation. b. Prepare a partial comparative statement of financial position and a partial comparative statement of profit or loss for 20x3, 20x2 and 20x1 using (i) gross presentation and (ii) net presentation.
For each of the following transactions, state whether the cost would be capitalized (C) or recorded as an expense (E). A. Purchased a machine, $100,000; gave long-term note B. Paid $600 for ordinary repairs C. Purchased a patent for $45,300 cash D. Paid $200,000 cash for addition to old building E. Paid $20,000 for monthly salaries F. Paid $250 for routine maintenance G. Paid $16,000 for major repairs
During the current year, Arkells Inc. made the following expenditures relating to plant machinery. Renovated five machines for $100,000 to improve efficiency in production of their remaining useful life of five years Low-cost repairs throughout the year totaled $70,000 Replaced a broken gear on a machine for $10,000 A. What amount should be expensed during the period? B. What amount should be capitalized during the period?
During the current year, Arkells Inc. made the following expenditures relating to plant machinery. Renovated seven machines for $250,000 to improve efficiency in production of their remaining useful life of eight years Low-cost repairs throughout the year totaled $79,000 Replaced a broken gear on a machine for $6,000 A. What amount should be expensed during the period? B. What amount should be capitalized during the period?
A company began constructing a new warehouse for its operations during the current year. In the year the company incurred interest of $20,000 on a working capital loan, and interest on a construction loan for the warehouse of $80,000. Interest computed on the average accumulated expenditures for the warehouse construction was $40,000. What amount of interest should be expensed for the year?
State whether they are capital and revenue expenditures.(a) Construction of building $10,00,000.(b) Repairs to furniture $50,000.(c) White-washing the building $80,000.(d) Pulling down the old building and rebuilding $4,00,000.