Answered: On June 1, Roadway's Trucking Company…

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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Question

On June 1, Roadway's Trucking Company paid $3,000 to overhaul the engine on a delivery truck to allow it to be used for two additional years. It also paid $7,100 to change the storage capacity of the truck so that it could haul more merchandise. Which of the following statements is TRUE?

The $3,000 is a capital expenditure and the $7,100 is an expense.

The $3,000 is an expense and the $7,100 is a capital expenditure.

Both items are capital expenditures.

Both items are expenses.

appreciate the help

thanks

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