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Q.21 Classify following into Capital or Revenue Expenditure :, 1. Addition of a new wing to the Factory ? 40,000., 2. Pulling out an old structure ? 750 and rebuilding it ? 10,500., 3. Installation of a gas boiler to replace one using coke., Scanned By Scanner Go

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Canital and Revenue : Expenditure and Receipts, 141, A New tyres to replace old tyres for delivery van., 6 Cost of hiring a refrigerator in a fish shop., 6. The cost of re-painting the exterior of Office Premises., 7. Petrol expenses of ? 420 paid for the car of one of the partners for an official visit, the car not, being an asset of the firm., 8. Hire charges of 1,000 for a compressor, when the firm's own compressor was under breakdown., 9. A factory shed was constructed at a cost of ? 1.20.000, A sum of 7,000 had been incurred in the, construction of temporary huts for storing building material., 10. Which of the following is not a capital expenditure ?, (a) Legal expenses for obtaining a bank loan., (b) Compensation paid to a dismissed employee., (c) Brokerage paid for purchase of land., (d) Expenses for pulling down an old Structure., 11. Purchased a Drill Machine from mechanics Co., for 5,000., 12. Received from Solomon & Co., an invoice for 1,500 for repairs to factory walls., 13. Received from Stewards & Co., the details for 250 in respect of cost of installation of the Drill, Machine., 14. Received from Joy Electricals Co., a bill for 6,000 for cost of replacing the old electrical installation, in the factory., 15. Received from Jairaj & Co., a bill for ? 15,000 for erection of additional factory sheds., 16. Interest accrued during the year on term loan raised and utilised for the purchase and erection, of plant; however, the production had not commenced till the last day of the accounting period., 17. Amount paid as compensation to an employee on retrenchment., 18. Amount spent on replacement of Rings and Pistons to get fuel efficiency., 19. Amount paid to a lawyer to defend a suit claiming that the factory site belonged to the firm; the, suit was not successful., 20. Amount spent to reduce working expenses. gniwollol ert, 21. Amount spent on making a few more exits in Cinema Hall to comply with Government orders., 22. Amount paid to obtain a licence to run the factory., 23. Interest on investment received from UTI., 24. A bad debt recovered during the year., 25. Amount received from IDBI as a medium term loan for working capital., on no blso mumo (C, 9wined to nckqmebei, dob to noitarmabei ert ao blaq notanimmo o), [Ans.: CE : 1, 2, 3, 9, 11, 13, 15, 16, 17, 20, 22, 25, JOsh RE: 4, 5, 6, 7, 8, 10, 12, 14, 18, 19, 21, 23, 24], O 22:, ..iih rnacons whether the following are Capital, Revenue or Deferred Revenue, Siete, Scanned By Scanner Go

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142, Accountancy and Financial Management (F. Y.B.Com.: SEM-, Q.23) M/s. Sirona Industries manufactures and sells special chairs required by the dentists. They, have incurred following expenses during the year ended 31 st March, 2014. You are requested to, state whether these expenses are capital expenses, revenue expenses or deferred revenue expenses, 1. Rent paid 25,000 to the landlord for the month of May, 2013 during the month of June, 2013, 2. Import duty paid 35,000 on purchase of new machinery., 3. Professional fees paid 25,000 to the advocate for preparing documents for purchase of new, office premises., sbet, 4. Annual membership fees paid ? 5,000 to the Machinery Manufactures Association of India., 5. Bank interest paid 35,000 on loan taken for purchase of land and buildings., 6. VAT tax paid 15,000., 7. 'Printing charges paid ? 28,000., 8. Transfer fees paid 25,000 to the society where the concern has purchased new office premises., Seyolame bs2eimeib of bisq, 06 aw (IDOL, April 2013, adapted), [Ans.: CE : 2, 3, 5, 8; RE : 1, 4, 6, 7], a.24, expenses., (a) Interest paid on bank overdraft 50,000 to State Bank of India for quarter ended 31st December, 2014., : State whether these expenses are capital expenses, revenue expenses or deferréd revenue, listob orto0 abnawete, (b) Custom duty paid 35,000 on import of Raw Materials., (c) Purchased old plant for 20,000., (d) * 300 were paid for the up-keep of a water pump. met no 18ey.edt pghyb.houngon de9otnl.a, (e) Paid audit fees 5,000 to Mr. Jayesh, our Chartered Accountant. g ant aevewor nslo to, (f) Paid ? 1,000 for annual renewal of factory license.me ns of ncitsane, (g) Reimbursed 12,500 Travelling expenses to Mr. Abhishek our salesman., (h) Purchased 20 box files for office use at 20 per file., notasl ert, 1ot lid soɔ 8 (STisl moi bevieoef, 28 bisq inuonmA., (IDOL, April 2015, adapted), [Ans.: CE : (c); RE : (a), (b), (d), (e), (f), (g), (h)), Q.25): State with reasons whether the following items of expenditure are capital or revenue :, Taj A new machinery was purchased for ? 80,000 and a sum of 1,000 was spent on it installation, and erection., n ol saneoil e nistdo of hieg, (b) Premium paid on the redemption of debentures. TU monl bavisoen inemtasvni no ahofhCes, (c) Commission paid on the redemption of debentures. 8ey edi ponub b9ievouen idab bisd AckS, (d) Commission paid on issue of debentures. sol miet muibem B es 1801 mol bevieoen tnuomA.as, (e) Cost of air-conditioning the office of the director of a company., (f) Damages paid on account of the breach of contract to supply certain goods., (g) Cost of replacement of an old and worn out part of machinery. w, (h) Repairs to a motor car met with an accident., (i) Cost of redecorating a cinema hall. sla 6wlisi to noilounlenoo DOL, Oct. 2016, adapted), t is a capital, hoeteng avitslumuo oe (Ans.: CE : a, e; RE : b, c, d, f, g, h,, Aros Visunsl lo rilnom ont 1o biaq 000 2, 201ede oonsieler9 to eueal o rnoieaimmos prithwiebnu 003,St 3 bis, Scanned By Scanner Go

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Capital And Revenue : Expenditure and Receipts, 127, Illustration 24):, State with reasons whether the following Expenses / Receipts are Capital or Revenue., 1. A delivery van worth ? 7,00,000 is brought by proprnetor for business activities., 2. Paid Audit Fees ? 10,000., 3. Legal expenses incurred in connection with the issue of capital., 4. Additional capital of 2,.00.000 introduced in business., 5. Recovery of ? 5,000 as bad debts., 6. Furniture worth ? 20,000 destroyed by fire, which was not insured. osG, : Plant and Machinery which stood in the books at ? 1,50.000 included a machine at a book value, of ? 3,400. This being obsolete, was sold off at ? 900 and was replaced by a new machine which, cost ? 4,800., Solution :, Sigot, enohecuO viondT, a (FYBAF, March 2018, adapted), Scanned By Scanner Go