Consider the expenditures listed below and classify each of the expenditures as a capital expenditure or a revenue expenditure related to machinery.

a. Purchase price.

b. Ordinary recurring repairs to keep the machinery in good working order.

c. Lubrication before machinery is placed in service.

d. Periodic lubrication after machinery is placed in service.

e. Major overhaul to extend useful life by three years.

f. Sales tax paid on the purchase price.

g. Transportation and insurance while machinery is in transit from seller to buyer.

h. Installation.

i. Training of personnel for initial operation of the machinery.

Answer rating: 100% (QA)

a Purchase price is a capital expenditure as it is a huge amount of payment for purchase of machiner... View the full answer