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Identification of capital and revenue expenditure.
For each of the following situations, indicate whether it is capital (C) or revenue (R) expenditure.
A. Purchased land and a building at a cost of $750,000 by paying $200,000 down and signing a 2 year note payable for the remainder.
B. Spent $235 on a tune-up for a truck used in making deliveries.
C. The owner of a restaurant paid a plumber $400 to install a new dishwasher in the kitchen.
D. Paid $1,300 in sales tax on a new delivery van when registering the van at the Registry of Motor Vehicles.
E. A new machine was accidently damaged during installation. The Uninsured cost to repair the machine was $1,250.
Would you expect share you select to affect return that you earn on your portfolio. Go through the method of working out why C is the best option for portfolio.
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