Question

1 Illustration 1: State which of the following expenditures are capital in nature and which are revenue in nature: Freight and cartage on the new machine rs.150; erection charges Rs.200. A sum of rs.10,000 on painting the new factory. Fixtures of the book value of rs.1,500 was sold off at rs.600 and new fixtures of the value of rs.1,000 were acquired, cartage on purchase rs.50. Rs.1,000 spent on repairs before using a second hand car purchased recently.

          1
Illustration 1:
State which of the following expenditures are capital in nature and
which are revenue in nature:
Freight and cartage on the new machine rs.150; erection
charges Rs.200.
A sum of rs.10,000 on painting the new factory.
Fixtures of the book value of rs.1,500 was sold off at rs.600 and
new fixtures of the value of rs.1,000 were acquired, cartage on
purchase rs.50.
Rs.1,000 spent on repairs before using a second hand car purchased
recently.

1
Illustration 1:
State which of the following expenditures are capital in nature and
which are revenue in nature:
Freight and cartage on the new machine rs.150; erection
charges Rs.200.
A sum of rs.10,000 on painting the new factory.
Fixtures of the book value of rs.1,500 was sold off at rs.600 and
new fixtures of the value of rs.1,000 were acquired, cartage on
purchase rs.50.
Rs.1,000 spent on repairs before using a second hand car purchased
recently.

Added by Manuel V.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Rabia Sarwar

Step 1

- **Capital Expenditure**: These are expenses incurred to acquire or upgrade physical assets such as property, industrial buildings, or equipment. These expenditures are capitalized, meaning the cost is spread over the useful life of the asset. - **Revenue Show more…

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Illustration 1: State which of the following expenditures are capital in nature and which are revenue in nature: Freight and cartage on the new machine Rs.150; erection charges Rs.200. > A sum of Rs.10,000 on painting the new factory > Fixtures of the book value of Rs.1,500 were sold off at Rs.600 and new fixtures of the value of Rs.1,000 were acquired; cartage on purchase Rs.50. > Rs.1,000 spent on repairs before using a second-hand car purchased recently.