Accountants distinguish between capital and revenue expenditures for some types of transactions. The entries for such transactions can be made to any one of the following accounts:
|
Balance sheet accounts |
|
|
a. |
Land |
|
b. |
Buildings |
|
c. |
Equipment |
|
d. |
Trucks |
|
e. |
Automobiles |
|
f. |
Accumulated depreciation |
|
Income statement accounts |
|
|
g. |
A revenue account |
|
h. |
An expense account. |
Required: For each transaction below, indicate the account to be adjusted. Explain your answers and state any assumptions you make.
Example:
b Architect fees to design building
____ Battery purchased for truck
____ Cash discount received on payment for equipment
____ Commission paid to real estate agent to purchase land
____ Cost of equipment test runs
____ Cost to remodel building
____ Cost to replace manual elevator with automatic elevator
____ Cost of sewage system
____ Equipment assembly expenditure
____ Expenditures for debugging equipment
____ Installation of air-conditioner in automobile
____ Insurance paid during construction of building
____ Legal fees associated with court case to defend title to land purchased
____ Oil change for truck
____ Payment for landscaping
____ Proceeds received on demolition of derelict building on land purchased
____ Expenditures for removal of derelict structures
____ Repair made to building after moving in
____ Repair of collision damage to truck
____ Repair of torn seats in automobile
____ Replacement of rusted fender on automobile
____ Replacement of transmission in automobile
____ Special floor foundations for installation of equipment
____ Tires purchased for truck
____ Transportation expenditures to bring equipment to plant.
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