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XYZ Co Incurred the Following Below Costs Related to the Office

Question 13

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XYZ Co. incurred the following below costs related to the office building used in operating its sports supply company:
Classify each of the costs as a capital expenditure or a revenue expenditure. For those costs identified as capital expenditures, classify each as an additional or replacement component.

Premises:
Replaced the roof that had been on the building 23 years.
Added a warehouse to the back of the building.
Installed window shutters on all windows.
Replaced the air conditioners with refrigerated air conditioners in the customer service areas.
Replaced a broken window.
Serviced all the air conditioners before summer started.
Repainted the interior walls.
Responses:
Revenue expenditure
Capital expenditure, additional
Capital expenditure, replacement

Correct Answer:

Replaced the roof that had been on the building 23 years.
Added a warehouse to the back of the building.
Installed window shutters on all windows.
Replaced the air conditioners with refrigerated air conditioners in the customer service areas.
Replaced a broken window.
Serviced all the air conditioners before summer started.
Repainted the interior walls.
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