Question

Gwen Jones owns and operates GJ Transport Co. During the past year, Gwen incurred the following costs related to an 18-wheel truck:
1. Changed engine oil.
2. Installed a television in the sleeping compartment of the truck.
3. Installed a wind deflector on top of the cab to increase fuel mileage.
4. Modified the factory-installed turbo charger with a special-order kit designed to add 50 more horsepower to the engine performance.
5. Removed the old GPS navigation system and replaced it with a newer model.
6. Replaced fog and cab light bulbs.
7. Replaced a headlight that had burned out.
8. Replaced a shock absorber that had worn out.
9. Replaced the hydraulic brake system that had begun to fail during her latest trip through the Rocky Mountains.
10. Replaced the old radar detector with a newer model that detects additional frequencies now used by many of the state patrol radar guns. The detector is wired directly into the cab, so that it is partially hidden. In addition, Gwen fastened the detector to the truck with a locking device that prevents its removal.
Classify each of the costs as a capital expenditure or revenue expenditure.



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  • CreatedFebruary 04, 2014
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