a. Paid $40,000 cash to replace a motor on equipment that extends its useful life by four years.b. Paid $200 cash per truck for the cost of their annual tune-ups.c. Paid $175 for the monthly cost of replacement filters on an air-conditioning system.d. Completed an addition to a building for $225,000 cash.1. Classify the above transactions as either a revenue expenditure or a capital expenditure.2. Prepare the journal entries to record transactions a and d.cesComplete this question by entering your answers in the tabs below.Required 1Required 2Classify the above transactions as either a revenue expenditure or a capital expenditure.Transactiona< Prev9 of 12Next >8:51 PM3/27/202FnLockInsertPrt ScF10F11F12F7F8F9F3F4F5F6%23%& Journal entry worksheet1<>Paid $40,000 cash to replace a motor on equipment that extends its useful lifeby four years.Note: Enter debits before credits,TransactionGeneral JournalDebitCreditRecord entryClear entryView general journal< Prev9 of 12Next >

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Description: a. Paid $40,000 cash to replace a motor on equipment that extends its useful life by four years.b. Paid $200 cash per truck for the cost of their annual tune-ups.c. Paid $175 for the monthly cost of replacement filters on an air-conditioning system.

Solution 1: Expenditure that increase the potential benefits from assets is considered as capital…

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a. Paid $40,000 cash to replace a motor on equipment that extends its useful life by four years. b. Paid $200 cash per truck for the cost of their annual tune-ups. c. Paid $175 for the monthly cost of replacement filters on an air-conditioning system. d. Completed an addition to a building for $225,000 cash. 1 Classifit the abovo trancactionn

a. Paid $40,000 cash to replace a motor on equipment that extends its useful life by four years. b. Paid $200 cash per truck for the cost of their annual tune-ups. c. Paid $175 for the monthly cost of replacement filters on an air-conditioning system. d. Completed an addition to a building for $225,000 cash. 1 Classifit the abovo trancactionn

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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