US Freight Lines Co. incurred the following costs related to trucks and vans used in operating its delivery service:1. Installed GPS systems on the trucks.2. Replaced the transmission fluid on a truck that had been in service for the past four years.3. Overhauled the engine on one of the trucks purchased three years ago.4. Performed annual service of installing new spark plugs, changing the oil, and greasing the joints of all trucks and vans.5. Rebuilt the engine on one of the vans that had been driven 80,000 miles.6. Repaired a flat tire on one of the vans.7. Installed a hydraulic lift to a truck.8. Tinted the back and side windows of the vans and installed a security system to discourage theft of contents.9. Replaced a truck’s suspension system with a new suspension system, allowing for heavier loads.10. Installed an optional third-row seat on one of the vans.Classify each of the costs as a capital expenditure or a revenue expenditure.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

US Freight Lines Co. incurred the following costs related to trucks and vans used in operating its delivery service:
1. Installed GPS systems on the trucks.
2. Replaced the transmission fluid on a truck that had been in service for the past four years.
3. Overhauled the engine on one of the trucks purchased three years ago.
4. Performed annual service of installing new spark plugs, changing the oil, and greasing the joints of all trucks and vans.
5. Rebuilt the engine on one of the vans that had been driven 80,000 miles.
6. Repaired a flat tire on one of the vans.
7. Installed a hydraulic lift to a truck.
8. Tinted the back and side windows of the vans and installed a security system to discourage theft of contents.
9. Replaced a truck’s suspension system with a new suspension system, allowing for heavier loads.
10. Installed an optional third-row seat on one of the vans.
Classify each of the costs as a capital expenditure or a revenue expenditure.

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Knowledge Booster
Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education