Question

eBook Calculator Capital and Revenue Expenditures Warner Freight Lines Co. incurred the following costs related to trucks and vans used in operating its delivery service: Classificati Classify each of the costs as a capital expenditure or a revenue expenditure. Cost 1. Changed the oil and greased the joints of all the trucks and Vans. 2. Changed the radiator fluid on a truck that had been in service for the past four years, 3. Installed a hydraulic lift to a van. 4. Installed security systems on four of the newer trucks. Overhauled the engine on one of the trucks purchased three years ago. Rebuilt the transmission on one of the vans that had been driven 40,000 miles. The van was no longer under warranty. Removed a two-way radio from one of the trucks and installed a new radio with a greater range of communication 8. Repaired a flat tire on one of the vans. 9. Replaced a truck's suspension system with a new suspension system that allows for the delivery of heavier loads. 10. Tinted the back and side windows of one of the vans to discourage theft of contents

Answer 1

Cost	Classification
1. Changed the oil and greased the joints of all the trucks and vans.	Revenue expenditure
2. Changed the radiator fluid on a truck that had been in service for the past four years.	Revenue expenditure
3. Installed a hydraulic lift to a van.	Capital expenditure
4. Installed security systems on four of the newer trucks.	Capital expenditure
5. Overhauled the engine on one of the trucks purchased three years ago	Capital expenditure
6.  Rebuilt the transmission on one of the vans that had been driven 40,000 miles. The van was no longer under warranty.	Capital expenditure
7. Removed a two-way radio from one of the trucks and installed a new radio with a greater range of communication.	Capital expenditure
8. Repaired a flat tire on one of the vans.	Revenue expenditure
9. Replaced a truck’s suspension system with a new suspension system that allows for the delivery of heavier loads.	Capital expenditure
10. Tinted the back and side windows of one of the vans to discourage theft of contents	Capital expenditure