(Learning Objective 2: Distinguish capital expenditures from expenses) AssumeByron Athletic Products, Inc., purchased conveyor-belt machinery. Classify each ofthe following expenditures as a capital expenditure or an immediate expense related tomachinery:a. Purchase priceb. Installation of conveyor-belt machineryc. Special reinforcement to the machinery platformd. Ordinary repairs to keep the machinery in good working ordere. Lubrication of the machinery before it is placed in servicef. Sales tax paid on the purchase priceg. Major overhaul to extend the machinery’s useful life by four yearsh. Training of personnel for initial operation of the machineryi. Income tax paid on income earned from the sale of products manufactured by themachineryj. Periodic lubrication after the machinery is placed in servicek. Transportation and insurance while machinery is in transit from seller to buyer
(Learning Objective 2: Distinguish capital expenditures from expenses) Assume
Byron Athletic Products, Inc., purchased conveyor-belt machinery. Classify each of
the following expenditures as a capital expenditure or an immediate expense related to
machinery:
a. Purchase price
b. Installation of conveyor-belt machinery
c. Special reinforcement to the machinery platform
d. Ordinary repairs to keep the machinery in good working order
e. Lubrication of the machinery before it is placed in service
f. Sales tax paid on the purchase price
g. Major overhaul to extend the machinery’s useful life by four years
h. Training of personnel for initial operation of the machinery
i. Income tax paid on income earned from the sale of products manufactured by the
machinery
j. Periodic lubrication after the machinery is placed in service
k. Transportation and insurance while machinery is in transit from seller to buyer
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