Jaime Baldwin owns and operates Love Transport Co. During the past year, Jaime incurred  the following costs related to an 18-wheel truck:   1. Changed engine oil. 2. Installed a wind deflector on top of the cab to increase fuel mileage. 3. Replaced fog and cab light bulbs. 4. Modified the factory-installed turbo charger with a special-order kit designed to add 50 more horsepower to the engine performance. 5. Replaced a headlight that had burned out. 6. Removed the old CB radio and replaced it with a newer model with a greater range. 7. Replaced the old radar detector with a newer model that detects the KA frequencies now used by many of the state patrol radar guns. The detector is wired directly into the cab, so that it is partially hidden. In addition, Jaime fastened the detector to the truck with a locking device that prevents its removal. 8. Replaced the hydraulic brake system that had begun to fail during his latest trip through the Rocky Mountains. 9. Installed a television in the sleeping compartment of the truck. 10. Replaced a shock absorber that had worn out.   Classify each of the costs as a capital expenditure or revenue expenditure.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Jaime Baldwin owns and operates Love Transport Co. During the past year, Jaime incurred  the following costs related to an 18-wheel truck:

 

1. Changed engine oil.

2. Installed a wind deflector on top of the cab to increase fuel mileage.

3. Replaced fog and cab light bulbs.

4. Modified the factory-installed turbo charger with a special-order kit designed to

add 50 more horsepower to the engine performance.

5. Replaced a headlight that had burned out.

6. Removed the old CB radio and replaced it with a newer model with a greater range.

7. Replaced the old radar detector with a newer model that detects the KA frequencies

now used by many of the state patrol radar guns. The detector is wired directly

into the cab, so that it is partially hidden. In addition, Jaime fastened the detector

to the truck with a locking device that prevents its removal.

8. Replaced the hydraulic brake system that had begun to fail during his latest trip

through the Rocky Mountains.

9. Installed a television in the sleeping compartment of the truck.

10. Replaced a shock absorber that had worn out.

 

Classify each of the costs as a capital expenditure or revenue expenditure.

 

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