e7-14 - four years 8 Tinted the back and side windows of...

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