Company A
A company purchased land and incurred the following costs:
$$\begin{array} { l l }
\text { Purchase price } & \$ 500,000 \
\text { Excavation costs } & 50,000 \
\text { Removal of ald building } & 12,500 \
\text { Broker fees } & 10,000 \
\text { Cost of a parking lot } & 25,000
\end{array}$$
-Which of the following costs related to the purchase of production equipment is considered a revenue expenditure?

Question

Company A
A company purchased land and incurred the following costs:
 $$\begin{array} { l l } 
\text { Purchase price } & \$ 500,000 \
\text { Excavation costs } & 50,000 \
\text { Removal of ald building } & 12,500 \
\text { Broker fees } & 10,000 \
\text { Cost of a parking lot } & 25,000
\end{array}$$
-Which of the following costs related to the purchase of production equipment is considered a revenue expenditure?

Quizplus · Accepted Answer

Repair and maintenance costs during the equipment's first year of service are considered revenue expenditures because they are incurred for the purpose of maintaining the operational efficiency of the equipment rather than enhancing its value or extending its life.

Company a A Company Purchased Land and Incurred the Following

Company a
A Company Purchased Land and Incurred the Following