Question

A company purchased a building for Rs.70,00,000 and spent Rs.20,00,000 on construction of an additional floor. After 6 months Rs.12,000 were spent on repairs of window panes broken by strong winds. Also an advertisement board of the company costing Rs,2,00,000 was put up on the front gate.
From the given information identify and calculate:
1. Capital Expenditure.
2. Revenue Expenditure.
3. Deferred revenue Expenditure.

Answer 1

Purchased building rupees 70 Lakh's and spent on additional 20 lakhs is capital expenditure.

But 12000 is spent for repairs window may be winds again broke the window panes i.e,it is revenue in nature.

Rupees.200000 advertising is a deferred revenue expenditure.