exercise 8-11 capital versus revenue expenditures

Project Description:

on january 1, 2010, jose company purchased a building for $200,000 and a delivery truck for $20,000. the following expenditures have been incurred during 2012: the building was painted at a cost of $5,000
to prevent leaking, new windows were installed in the building at a cost of $10,000
to improve production, a new conveyor system was installed at a cost of $40,000
the delivery truck was repainted with a new company logo at a cost of $1,000
to allow better handling of large loads, a hydraulic lift system was installed on the truck at a cost of $5,000
the truck's engine was overhauled at a cost of $4,000
1.determine which of those costs should be capitalized. also, identify and analyze the effect of the capitlaized costs. assume that all costs were incurred on jauary 1, 2012.
2. determine the amount of deprecitaion for the year 2012. the company uses the straight-line method and depreciates the building over 25 years and the truck over six years. assume zero residual value for all assets.
3. how would the assets appear on the balance sheet of december 31, 2012?
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