Assume Akro Products Inc purchased conveyorbelt machinery Re

Assume Akro Products, Inc., purchased conveyor-belt machinery. Requirement 1. Classify each of the following expenditures as a capital expenditure or an immediate expense related to machinery. a. Major overhaul to extend the machinery\'s useful life by five years b. Periodic lubrication after the machinery is placed in service c. Purchase price d. Training of personnel for initial operation of the machinery e. Special reinforcement to the machinery platform f. Transportation and insurance while machinery is in transit from seller to buyer g. Ordinary repairs to keep the machinery in good working order h. Lubrication of the machinery before it is placed in service i. Sales tax paid on the purchase price j. Installation of the conveyor-belt machinery k. Income tax paid on income earned from the sale of products manufactured by the machinery Choose from any drop-down list and then continue to the next question.

Solution

Classification of capital and revenue expenditure:

a. Capital Expenditure

b.Revenue Expenditure

c.Capital Exp

d. Capital Exp.

e. Capital Exp

f. Capital Exp

g. Revenue Exp

h. Capital Exp

i. Revenue Exp

j. Capital Exp

k. Revenue Exp