Exercise B Effect of revenue expenditures versus capital expenditures on financial statements
Ford Construction Company purchased a forklift for $ cash. It had an estimated useful life of four years and a $ salvage value. At the beginning of the third year of use, the company spent an additional $ that was related to the forklift. The company's financial condition just prior to this expenditure is shown in the following statements model.
tableBalance Sheet,Income Statement,tableStatement ofCash FlowAssets,k Ecdity,,,,CashBook Value of Forklift,C StkRet. Earn.,Rev., Exp.,Net Inc.NANANANA
Required
Record the $ expenditure in the statements model under each of the following independent assumptions:
a The expenditure was for routine maintenance.
b The expenditure extended the forklift's life.
c The expenditure improved the forklift's operating capacity.
