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Business Accounting Loose Leaf for Financial Accounting: Information for Decisions

1. Revenue expenditure: The costs which are related to the daily operations of the business or which are related to specific revenue transactions. The maintenance and repair expenses or the cost of goods sold comes under the revenue expenditure. It is consumed for a short period of time. Capital expenditure: The expenditures made for the fixed assets which will be there for a long time with the company and are expected to be productive for a long time. To classify: The expenses made as revenue expenditure or capital expenditure. a) Capital expenditure b) Revenue expenditure c) Revenue expenditure d) Capital expenditure The life of a fixed asset is extended by 4 years by doing a capital expenditure. It will be there for a long term and it will be charged to expense via depreciation. A cost is incurred for each truck for their annual tune ups which will help in increasing the revenue and it is paid through revenue expenditure. The size of the expenditure is low such as $200 and it will be there for a short term. Each month $175 is paid for the monthly cost of replacement filters on an air-conditioning system through the revenue expenditure. The size of the expenditure is low and is for a short term. An addition is made to the office building for a huge amount of $225,000 cash which is a capital expenditure. The size of the expenditure is high, and an addition will be there for a long term. 2. Revenue expenditure: The costs which are related to the daily operations of the business or which are related to specific revenue transactions. The maintenance and repair expenses or the cost of goods sold comes under the revenue expenditure. It is consumed for a short period of time. Capital expenditure: The expenditures made for the fixed assets which will be there for a long time with the company and are expected to be productive for a long time. To prepare: Journal entry to record the transactions of part a and d Preparation of Journal entry to record the transactions of part a and d is as follows: S. No. General entry Debit Credit a) Equipment $40,000.00 Cash $40,000.00 (To record expense incurred to increase useful life of asset.) d) Building $2,25,000.00 Cash $2,25,000.00 (To record completion of addition to the building.)

1. Revenue expenditure: The costs which are related to the daily operations of the business or which are related to specific revenue transactions. The maintenance and repair expenses or the cost of goods sold comes under the revenue expenditure. It is consumed for a short period of time. Capital expenditure: The expenditures made for the fixed assets which will be there for a long time with the company and are expected to be productive for a long time. To classify: The expenses made as revenue expenditure or capital expenditure. a) Capital expenditure b) Revenue expenditure c) Revenue expenditure d) Capital expenditure The life of a fixed asset is extended by 4 years by doing a capital expenditure. It will be there for a long term and it will be charged to expense via depreciation. A cost is incurred for each truck for their annual tune ups which will help in increasing the revenue and it is paid through revenue expenditure. The size of the expenditure is low such as $200 and it will be there for a short term. Each month $175 is paid for the monthly cost of replacement filters on an air-conditioning system through the revenue expenditure. The size of the expenditure is low and is for a short term. An addition is made to the office building for a huge amount of $225,000 cash which is a capital expenditure. The size of the expenditure is high, and an addition will be there for a long term. 2. Revenue expenditure: The costs which are related to the daily operations of the business or which are related to specific revenue transactions. The maintenance and repair expenses or the cost of goods sold comes under the revenue expenditure. It is consumed for a short period of time. Capital expenditure: The expenditures made for the fixed assets which will be there for a long time with the company and are expected to be productive for a long time. To prepare: Journal entry to record the transactions of part a and d Preparation of Journal entry to record the transactions of part a and d is as follows: S. No. General entry Debit Credit a) Equipment $40,000.00 Cash $40,000.00 (To record expense incurred to increase useful life of asset.) d) Building $2,25,000.00 Cash $2,25,000.00 (To record completion of addition to the building.)

Solution Summary: The author explains that revenue expenditure and capital expenditure are related to the daily operations of the business or specific revenue transactions.

Loose Leaf for Financial Accounting: Information for Decisions

Loose Leaf for Financial Accounting: Information for Decisions

9th Edition

ISBN: 9781260158762

Author: John J Wild

Publisher: McGraw-Hill Education

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Chapter 8 Solutions

Loose Leaf for Financial Accounting: Information for Decisions

Ch. 8 - Prob. 1DQ Ch. 8 - Prob. 2DQ Ch. 8 - Prob. 3DQ Ch. 8 - Prob. 4DQ Ch. 8 - Prob. 5DQ Ch. 8 - Prob. 6DQ Ch. 8 - Prob. 7DQ Ch. 8 - Identify events that might lead to disposal of a...Ch. 8 - Prob. 9DQ Ch. 8 - Prob. 10DQ

Ch. 8 - Prob. 11DQ Ch. 8 - Prob. 12DQ Ch. 8 - Prob. 13DQ Ch. 8 - Prob. 14DQ Ch. 8 - Prob. 15DQ Ch. 8 - Prob. 16DQ Ch. 8 - Prob. 17DQ Ch. 8 - Prob. 18DQ Ch. 8 - Refer to the December 31, 2016, balance sheet of...Ch. 8 - Prob. 20DQ Ch. 8 - Prob. 1QS Ch. 8 - Prob. 2QS Ch. 8 - Prob. 3QS Ch. 8 - Prob. 4QS Ch. 8 - Prob. 5QS Ch. 8 - Prob. 6QS Ch. 8 - Prob. 7QS Ch. 8 - Prob. 8QS Ch. 8 - Prob. 9QS Ch. 8 - Prob. 10QS Ch. 8 - Identify the following assets a through i as...Ch. 8 - Prob. 12QS Ch. 8 - Prob. 13QS Ch. 8 - Caleb Co. owns a machine that costs $42,400 with...Ch. 8 - Prob. 15QS Ch. 8 - Prob. 16QS Ch. 8 - Prob. 1E Ch. 8 - Prob. 2E Ch. 8 - Prob. 3E Ch. 8 - Prob. 4E Ch. 8 - Prob. 5E Ch. 8 - Prob. 6E Ch. 8 - Prob. 7E Ch. 8 - Prob. 8E Ch. 8 - Prob. 9E Ch. 8 - Prob. 10E Ch. 8 - Prob. 11E Ch. 8 - Prob. 12E Ch. 8 - Prob. 13E Ch. 8 - Prob. 14E Ch. 8 - Prob. 15E Ch. 8 - Prob. 16E Ch. 8 - Prob. 17E Ch. 8 - Prob. 18E Ch. 8 - Prob. 19E Ch. 8 - Prob. 20E Ch. 8 - Prob. 21E Ch. 8 - Prob. 22E Ch. 8 - Prob. 23E Ch. 8 - On January 2, 2018, Bering Co. disposes of a...Ch. 8 - Prob. 25E Ch. 8 - Prob. 26E Ch. 8 - Timberly Construction negotiates a lump-sum...Ch. 8 - Prob. 2PSA Ch. 8 - Prob. 3PSA Ch. 8 - Prob. 4PSA Ch. 8 - Prob. 5PSA Ch. 8 - Onslow Co. purchases a used machine for $178,000...Ch. 8 - Prob. 7PSA Ch. 8 - Prob. 8PSA Ch. 8 - Prob. 2PSB Ch. 8 - Prob. 4PSB Ch. 8 - Prob. 5PSB Ch. 8 - Prob. 6PSB Ch. 8 - Prob. 7PSB Ch. 8 - Prob. 8PSB Ch. 8 - Selected ledger account balances for Business...Ch. 8 - Prob. 3FSA Ch. 8 - Prob. 5BTN

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