Which is an capital expenditure and revenue expenditure.
1.Overhauled and reconstructed lathe motor to produce more parts per hour.
2. Yearly computer maintenance contract.
3. Construct walls to divide the store offices.
4. Poured a concrete walkway between the offices.
5. Semiannual maintenance checkup on the press.
6. Installed a new adapter system on the lathe.
7. Fixed a leak in the roof of the office building.
8. Paid the city to trim the tree in front of the office building.
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To determine whether an expense is a capital expenditure or a revenue expenditure, we need to consider the nature of the expense and its impact on the business.
1. Overhauled and reconstructed lathe motor to produce more parts per hour.
This expense would be considered a capital expenditure because it involves significant improvements to the machinery, resulting in long-term benefits and increased productivity.
2. Yearly computer maintenance contract.
This expense would be classified as a revenue expenditure because it is an ongoing expense required to maintain the computers' functionality and does not lead to any permanent improvements.
3. Construct walls to divide the store offices.
The construction of walls to divide the store offices is a capital expenditure. It involves the creation of a permanent structure that improves the functionality of the space in the long term.
4. Poured a concrete walkway between the offices.
Similar to the previous example, pouring a concrete walkway between the offices would be considered a capital expenditure. It involves the creation of a permanent structure with long-term benefits.
5. Semiannual maintenance checkup on the press.
This expense is classified as a revenue expenditure because it is a routine maintenance cost required to ensure the press's proper functioning on an ongoing basis.
6. Installed a new adapter system on the lathe.
Installing a new adapter system on the lathe would be considered a capital expenditure. It involves the addition of a new component that enhances the machinery's capabilities and generates long-term benefits.
7. Fixed a leak in the roof of the office building.
Fixing a leak in the roof is typically considered a revenue expenditure. While it involves repair work, it is considered a regular maintenance cost required to maintain the building's condition.
8. Paid the city to trim the tree in front of the office building.
This expense would also be classified as a revenue expenditure as it is a periodic expense for the upkeep and maintenance of the office building's exterior.