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Identify each of the following items as a capital expenditure​ (C), an immediate expense​ (E), or neither​ (N). Transaction Type of Expenditure 1. Constructed a new parking lot on leased property for $300,000. 2. Paid property taxes of $75,000 for the first year a new administrative services building was occupied. 3. Paid dividends of $40,000. 4. Paid interest on a six-month note payable that financed the construction of a new plant building, $550,000. 5. Purchased equipment for a new manufacturing plant, $6,000,000. Transaction Type of Expenditure 6. Paid $90,000 for the installation of the equipment in (5). 7. Repaired plumbing in existing manufacturing plant, paying $27,000. 8. Paid $148,000 to tear down an old building on a new manufacturing plant site. 9. Purchased new network servers for $29,000. 10. Paid maintenance costs of $31,000 on the equipment in (5) during its first year of use.

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To Identify each of the given transaction as a capital expenditure​ (C), an immediate expense​ (E), or neither​ (N).

Immediate Expense can be defined as the expenses that are recorded immediately as they occur or as they are incurred which in turn  lead to reduction in the  net profit of a company or an organization  income statement.

Capital expenditure are money which a business, company or organization used to carryout the following:

  • Repair  assets
  • Buy assets
  • Maintain assets so as to extend the assets useful life

Now let identify each transaction as a capital expenditure​ (C), an immediate expense​ (E), or neither​ (N).

  • Constructed a new parking lot on leased property for $300,000.

        Type of Expenditure: Capital expenditure

  • Paid property taxes of $75,000 for the first year a new administrative services building was occupied.

       Type of Expenditure: Immediate expense

  • Paid dividends of $40,000.

       Type of Expenditure: Neither

  • Paid interest on a six-month note payable that financed the construction of a new plant building, $550,000.

        Type of Expenditure: Capital expenditure

  • Purchased equipment for a new manufacturing plant, $6,000,000.   Type of Expenditure: Capital expenditure

  • Paid $90,000 for the installation of the equipment in (5).

       Type of Expenditure: Capital expenditure

  • Repaired plumbing in existing manufacturing plant, paying $27,000.

         Type of Expenditure: Immediate expense

  • Paid $148,000 to tear down an old building on a new manufacturing plant site.

       Type of Expenditure: Capital expenditure

  • Purchased new network servers for $29,000.

        Type of Expenditure: Capital expenditure

  • Paid maintenance costs of $31,000 on the equipment in (5) during its first year of use.

       Type of Expenditure: Immediate expense

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