On June 1,Roadway's Trucking Company paid $3,000 to overhaul the engine on a delivery truck to allow it to be used for two additional years.It also paid $7,500 changing the storage capacity of the truck so that it could haul more merchandise.Which of the following statements is TRUE?
A) The $3,000 is a capital expenditure and the $7,500 is an expense.
B) The $3,000 is an expense and the $7,500 is a capital expenditure.
C) Both items are capital expenditures.
D) Both items are expenses.
Correct Answer:
Verified
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