Pat's Pets recently paid $15,000 to have the engine in its delivery van overhauled.The estimated useful life of the van was originally estimated to be 4 years.The overhaul is expected to extend the useful life of the van to 10 years.The overhaul is regarded as a(n):

Question

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The overhaul of the engine in the delivery van is a capital expenditure because it is expected to extend the useful life of the van from 4 years to 10 years. A capital expenditure is an expenditure that is expected to benefit the company beyond the current accounting period and is usually recorded as an asset on the balance sheet.

Pat's Pets Recently Paid $15,000 to Have the Engine in Its