: Distinguishing capital expenditures from revenue expenditures consider the following expenditures:

a. Purchase price.

b. Ordinary recurring repairs to keep the machinery in good working order.

c. Lubrication before machinery is placed in service.

d. Periodic lubrication after machinery is placed in service.

e. Major overhaul to extend useful life by three years.

f. Sales tax paid on the purchase price.

g. Transportation and insurance while machinery is in transit from seller to buyer.

h. Installation.

i. Training of personnel for initial operation of the machinery. Classify each of the expenditures as a capital expenditure or revenue expenditure

Particular

Revenue/Capital expenditure

a. Purchase price

Capital expenditure

b. Ordinary recurring repairs to keep the machinery in good working order.

Revenue expenditure

c. Lubrication before machinery is placed in service

Capital expenditure

d. Periodic lubrication after machinery is placed in service

Revenue expenditure

e. Major overhaul to extend useful life by three years

Capital expenditure

f. Sales tax paid on the purchase price

Capital expenditure

g. Transportation and insurance while machinery is in transit from seller to buyer

Capital expenditure

h. Installation

Capital expenditure

i. Training of personnel for initial operation of the machinery. Classify each of the expenditures as a capital expenditure or revenue expenditure

Capital expenditure