Distinguishing capital expenditures from revenue expenditures Consider the following expenditures:

a. Purchase price.

b. Ordinal), 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. Classify each of the expenditures as a capital expenditure or a revenue expenditure related to machinery.

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Capital expenditure Capital expenditure is that expenditure which increases the life of assets and also efficiency These expenditure also includes the amount spend for acquisition of the assets and im... View the full answer