Question

State with the reason wether following our capital or revenue expenditures:
1. Custom duty paid on import of machinery.
2. Wages paid in connection with the erection of a new machinery.
3. Rs.5000 spent on repainting the factory.

Answer 1

Hello!!

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Capital expenditure is those expenditure which benefit is arising for more then 1 accounting period whereas , Revenue expenditure are those which benefits don't arise over year. It is of non-reccuring.

Custom duty paid, is a Revenue expenditure because it's benefit will not arise over an accounting period
Wages paid will be also a Revenue expenditure because it's benefit is also not arising over an accounting period.

Repainting of the Factory will be Capital expenditure , because it's benefit will arise for over an accounting period.

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Answer 2

1. Custom duty paid on import of machinery - capital expenditure.
reason: custom duty paid is added to cost of machinery

2. Wages paid in connection with the erection of a new machinery - capital expenditur
reason: this expenses is paid of machinery cost . its added value to the asset . 

3. Rs.5000 spent on repainting the factory.- revenue expenditure
Reason :This expenditure helps to maintain the business.


Hope its useful