Question

Second hand furniture worth 6000 was purchased .it was repaired for 600and installed by workman to whom 200 was paid as wages the furniture should be capitalised for

Answer 1

Answer:

Second hand furniture worth 6000 was purchased .it was repaired for 600and installed by workman to whom 200 was paid as wages the furniture should be capitalised for

Second hand furniture worth 6000 was purchased .it was repaired for 600and installed by workman to whom 200 was paid as wages the furniture should be capitalised for

Answer 2

Answer:

The furniture should be capitalized for ₹6800.

Explanation:

Purchase price of furniture=     ₹6000
Repair charges=                        ₹600
Installation charges=                 ₹200
                                                  _______
The total cost of furniture=        ₹6800

∴ Furniture will be capitalized for ₹6800

Reason:

Capital Expenditures are for fixed assets, which are expected to be productive assets for an extended period of time.
Here, in the given question, the given transaction is a capital expenditure, as all the amount paid up to the point the furniture is ready for use is included in the cost of the furniture. Repair and Installation charges of the purchased furniture are included in the price of furniture, being a capital expenditure.

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