Furniture of the book value of Rs.1,500 was sold for Rs.600 and new fixture of Rs.1,000 was purchased and cartage of Rs.25 paid.What is the amount of capital expenditure?

Rs. 1,500

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Rs. 900

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Rs. 1,000

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Rs. 1,025

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Open in App

Solution

The correct option is C Rs. 1,025
Capital expenditure - An amount spent to acquire or upgrade productive assets (such as buildings, machinery and equipment, vehicles) in order to increase the capacity or efficiency of a company for more than one accounting period. Also called capital spending. for e.g., purchase of furiture and fixture, building/ plant and machinery etc. Cartage is also included in capital expenditure.
Cartage - Charge for transporting goods for short distances, such as within a commercial area or town. Also called drayage or haulage.
The amount of capital expenditure in the given question is -
Purchase of new fixture Rs. 1000
Add : Cartage paid Rs. 25
_________
Total Rs. 1025

Suggest Corrections

Similar questions

Q. A consigned goods of Rs.

20, 000

to M and paid Rs.

1, 000

for expense. The consignee paid Rs.

200

for freight and Rs.

100

for octroi.

80 %

of goods was sold and commission of Rs.

1, 000

was paid. Value of closing stock

=

Q. State whether the following expenditure are Capital, Revenue or Deferred Revenue. Give reasons:
(i) Furniture of the book value of ₹ 10,000 were sold off at ₹ 2,500 and new furniture of the value of ₹ 6,000 were acquired, cartage on purchase ₹ 50.
(ii) Property purchased for ₹ 20,00,000 and ₹ 1,50,000 paid for its registration and legal fee.
(iii) Replacement of old machine by a new one.
(iv) Damages paid by a transport company to its passengers injured in an accident.
(v) Erection of shed for parking of vehicles at a cost of ₹ 10 Lac.

Q. A motor car which was purchased for Rs. 20,000 had its book value Rs. 12,000 and was sold for Rs. 25,000. What is the capital profit?

Trial balance of John did not agree. He put the difference to suspense account and discovered the following errors.

(a) In the sales book for the month of January total of page 2 was carried forward to page 3 as Rs. 1,000 instead of Rs. 1200 and total of page 6 was carried forward to page 7 as Rs. 5,600 instead of Rs. 5,000.

(b) Wages paid for the installation of machinery Rs. 500 was posted to wages account as Rs. 50.

(c) Machinery purchased from R and Co for Rs. 10,000 on credit was entered in purchase book as Rs. 6,000 and posted there from to R and Co as Rs. 1,000.

(d) Credit sates to Mohan Rs. 5,000 were recorded in purchase book.

(e) Goods returned to Ram Rs. 1,000 were recorded in the sales book.

(f) Credit purchase from S and Co for Rs. 6,000 were recorded in the sales book. However, S and Co were correctly credited.

(g) Credit purchase from M and Co Rs. 6,000 were recorded in sales book as Rs. 2,000 and posted therefrom to the credit of M and Co as Rs. 1,000.

(h) Credit sales to Raman Rs. 4,000 posted to the credit of Raghvan as Rs. 1,000.

(i) Bill receivable for Rs. 1,600 from Noor was dishonoured and posted to the debit of allowances account.

(j) Cash paid to Mani Rs. 5,000 against our acceptance was debited to Manu.

(k) Old furniture sold for Rs. 3,000 was posted to sales account as Rs. 1,000.

(l) Depreciation provided on furniture Rs. 800 was not posted.

(m) Material Rs. 10.000 and wages Rs. 3,000 were used for the construction of a building. No adjustment was made in the books.

Rectify the errors and prepare suspense to ascertain the difference in trial balance.

Trial balance of John did not agree. He put the difference to suspense account and discovered the following errors :

(a)	In the sales book for the month of January total of page 2 was carried forward to page 3 as Rs 1,000 instead of Rs 1,200 and total of page 6 was carried forward to page 7 as Rs 5,600 instead of Rs 5,000.
(b)	Wages paid for installation of machinery Rs 500 was posted to wages account as Rs 50.
(c)	Machinery purchased from R & Co. for Rs 10,000 on credit was entered in Purchase Book as Rs 6,000 and posted there from to R & Co. as Rs 1,000.
(d)	Credit sales to Mohan Rs 5,000 were recorded in Purchases Book.
(e)	Goods returned to Ram Rs 1,000 were recorded in Sales Book.
(f)	Credit purchases from S & Co. for Rs 6,000 were recorded in sales book. However, S & Co. was correctly credited.
(g)	Credit purchases from M & Co. Rs 6,000 were recorded in Sales Book as Rs 2,000 and posted there from to the credit of M & Co. as Rs 1,000.
(h)	Credit sales to Raman Rs 4,000 posted to the credit of Raghvan as Rs 1,000.
(i)	Bill receivable for Rs 1,600 from Noor was dishonoured and posted to debit of Allowances account.
(j)	Cash paid to Mani Rs 5,000 against our acceptance was debited to Manu.
(k)	Old furniture sold for Rs 3,000 was posted to Sales account as Rs 1,000.
(l)	Depreciation provided on furniture Rs 800 was not posted.
(m)	Material Rs 10,000 and wages Rs 3,000 were used for construction of building. No adjustment was made in the books.

Rectify the errors and prepare suspense to ascertain the difference in trial balance.

Join BYJU'S Learning Program