San is a farmer. Identify whether each of the following will be treated as revenue or capital
Question:
Séan is a farmer. Identify whether each of the following will be treated as revenue or capital expenditure in his financial statements:
1. A new trailer.
2. Tax for the tractor.
3. New fencing that splits a field into two smaller fields. This will enable Séan to graze one field and cut the other for silage. The fencing is expected to last for five years. This will lead to increased income.
4. Replacing fencing at the perimeter of one of the fields.
5. Feedstuffs for the cattle.
6. An extension to the shed.
7. Replacing the wiring on the current shed.
8. Draining two fields at a cost of £10,000. This field had not been drained before.
Step by Step Answer:
1 A new trailer is a capital expenditure because it is depreciated It will be treated as revenue in ...View the full answer
Introduction To Financial Accounting
ISBN: 9781526803009
9th Edition
Authors: Anne Marie Ward, Andrew Thomas
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