Some of the following items should be treated as capital and some as revenue.Carriage paid to bring the purchased machinery to the works.Complete redecoration of the premises at a cost of Kshs.150,000.A quarterly account for heating.The purchase of a soft drinks vending machine for the canteen with a stock of soft drinks.Wages paid by a building contractor to his own workmen for the erection of an office in the builder's stockyard.Required:For each item, give an appropriate classification. Give justification for each classification.

Capital Expenditure- It is the expenditure that is incurred for purchasing of assets or for the…

Answered: Some of the following items should be…

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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Some of the following items should be treated as capital and some as revenue.
Carriage paid to bring the purchased machinery to the works.
Complete redecoration of the premises at a cost of Kshs.150,000.

A quarterly account for heating.

The purchase of a soft drinks vending machine for the canteen with a stock of soft drinks.
Wages paid by a building contractor to his own workmen for the erection of an office in the builder's stockyard.

Required:

For each item, give an appropriate classification. Give justification for each classification.

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