2 Semester Cengage Now, Warren Accounting
26th Edition
ISBN: 9781305662308
Author: WARREN
Publisher: Cengage
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Chapter 10, Problem 10.5EX
To determine
Capital expenditure: It refers to the amount spent on acquiring, maintaining, and improving the fixed assets that increases its productivity or extends useful life. It provides benefits in the future period.
Revenue expenditure: It refers to the amount spent on normal maintenance and repairs of fixed assets to generate revenue in the current period. It provides benefits only in the current period.
To classify: each of the given costs as a capital expenditure or a revenue expenditure.
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Jackie Fox owns and operates Platinum Transport Co. During the past year, Jackie incurred the following costs related to an 18-wheel truck:1. Changed engine oil.2. Installed a television in the sleeping compartment of the truck.3. Installed a wind deflector on top of the cab to increase fuel mileage.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. Replaced a shock absorber that had worn out.7. Replaced fog and cab light bulbs.8. Replaced the hydraulic brake system that had begun to fail during his latest trip through the Rocky Mountains.9. Removed the old radio and replaced it with a new communications module.10. Replaced the old radar detector with a newer model that is fastened to the truck with a locking device that prevents its removal.Classify each of the costs as a capital expenditure or a revenue expenditure.
Jackie Fox owns and operates Platinum Transport Co. During the past year, Jackie incurred the following costs related to an 18-wheel truck:1. Changed engine oil.2. Installed a television in the sleeping compartment of the truck.3. Installed a wind deflector on top of the cab to increase fuel mileage.4. Modified the factory-installed turbo charger with a special-order kit designed to add 50 more horsepowerto the engine performance.5. Replaced a headlight that had burned out.6. Replaced a shock absorber that had worn out.7. Replaced fog and cab light bulbs.8. ReplacedthehydraulicbrakesystemthathadbeguntofailduringhislatesttripthroughtheRockyMountains.9. Removed the old radio and replaced it with a new communications module.10. Replaced the old radar detector with a newer model that is fastened to the truck with a locking device that prevents its removal.Classify each of the costs as a capital expenditure or a revenue expenditure.
Capital and Revenue Expenditures
Kimbrell Freight Lines Co. incurred the following costs related to trucks and vans used in operating
its delivery service:
Classify each of the costs as either a capital expenditure or a revenue expenditure.
Choose a C for capital or an R for revenue in the box following the item.
1.
Changed the oil and greased the joints of all the trucks and vans.
2.
Installed a hydraulic lift to a van
3.
Installed a new engine in a truck purchased three years ago
4.
Repaired a flat tire on one of the vans
5.
Installed a refrigeration unit on a truck to equip it to carry perishable goods
Chapter 10 Solutions
2 Semester Cengage Now, Warren Accounting
Ch. 10 - ONeil Office Supplies has a fleet of automobiles...Ch. 10 - Prob. 2DQCh. 10 - Prob. 3DQCh. 10 - Prob. 4DQCh. 10 - Immediately after a used truck is acquired, a new...Ch. 10 - Keyser Company purchased a machine that has a...Ch. 10 - Is it necessary for a business to use the same...Ch. 10 - Prob. 8DQCh. 10 - For some of the fixed assets of a business, the...Ch. 10 - a. Over what period of time should the cost of a...
Ch. 10 - Straight-line depreciation A building acquired at...Ch. 10 - Straight-line depreciation Equipment acquired at...Ch. 10 - Units-of-activity depreciation A truck acquired at...Ch. 10 - Units-of-activity depreciation A tractor acquired...Ch. 10 - Double declining-balance depreciation A building...Ch. 10 - Double-declining-balance depreciation Equipment...Ch. 10 - Revision of depreciation Equipment with a cost of...Ch. 10 - Revision of depreciation A truck with a cost of...Ch. 10 - Capital and revenue expenditures On February 14,...Ch. 10 - Capital and revenue expenditures On August 7,...Ch. 10 - Sale of equipment Equipment was acquired at the...Ch. 10 - Sale of equipment Equipment was acquired at the...Ch. 10 - Prob. 10.7BPECh. 10 - Prob. 10.7APECh. 10 - Prob. 10.8BPECh. 10 - Prob. 10.8APECh. 10 - Prob. 10.9APECh. 10 - Prob. 10.9BPECh. 10 - Costs of acquiring fixed assets Melinda Stoffers...Ch. 10 - Prob. 10.2EXCh. 10 - Determining cost of land Northwest Delivery...Ch. 10 - Prob. 10.4EXCh. 10 - Prob. 10.5EXCh. 10 - Capital and revenue expenditures Quality Move...Ch. 10 - Nature of depreciation Tri-City Ironworks Co....Ch. 10 - Prob. 10.8EXCh. 10 - Prob. 10.9EXCh. 10 - Prob. 10.10EXCh. 10 - Depreciation by units-of-output method Prior to...Ch. 10 - Depreciation by two methods A John Deere tractor...Ch. 10 - Depreciation by two methods A storage tank...Ch. 10 - Partial-year depreciation Sandblasting equipment...Ch. 10 - Revision of depreciation A building with a cost of...Ch. 10 - Capital expenditure and depreciation; parital-year...Ch. 10 - Entries for sale of fixed asset Equipment acquired...Ch. 10 - Prob. 10.18EXCh. 10 - Depletion entries Big Sky Mining Co. acquired...Ch. 10 - Prob. 10.20EXCh. 10 - Book value of fixed assets Apple Inc. designs,...Ch. 10 - Balance sheet presentation List the errors you...Ch. 10 - Prob. 10.24EXCh. 10 - Prob. 10.23EXCh. 10 - Asset traded for similar asset A printing press...Ch. 10 - Prob. 10.26EXCh. 10 - Entries for trade of fixed asset On July 1, Twin...Ch. 10 - Entries for trade of fixed asset On October 1,...Ch. 10 - Allocating payments and receipts to fixed asset...Ch. 10 - Comparing three depreciation methods Montes Coffee...Ch. 10 - Depreciation by three methods; partial years...Ch. 10 - Prob. 10.4APRCh. 10 - Transactions for fixed assets, including sale The...Ch. 10 - Amortization and depletion entries Data related to...Ch. 10 - Allocating payments and receipts to fixed asset...Ch. 10 - Comparing three depreciation methods Waylander...Ch. 10 - Depreciation by three methods; partial years...Ch. 10 - Depreciation by two methods; sale of fixed asset...Ch. 10 - Transactions for fixed assets, including sale The...Ch. 10 - Amortization and depletion entries Data related to...Ch. 10 - Prob. 10.1CPCh. 10 - Prob. 10.2CPCh. 10 - Effect of depreciation on net income Tuttle...Ch. 10 - Fixed asset turnover: three industries The...
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