Revenue expenditure is recurring.... it has to be paid again and again! How to distinguish between revenue and capital expenditure – Activity 1 Purchase of new delivery van Murray Traders purchased a new delivery van. The following payments were made when the delivery van was purchased. £ Delivery van 17,400 Insurance of van 860 Adapting shelving to create more storage space 520 First tank of fuel 30 Road fund licence 160 “Murray Painting Traders” and the business logos on the side of the van 220 Required Calculate the total capital expenditure and total revenue expenditure including you workings and then transfer the total amounts to the statements at the end of the exercise. Capital expenditure: Revenue expenditure: The delivery van account should record £___________ (the total capital expenditure) as the cost of the van and the annual depreciation charge should be based on this amount. The revenue expenditure of £___________ should be charged to the profit and loss account at the end of the financial period. – Activity 2 Installation of new equipment
Revenue expenditure is recurring.... it has to be paid again and again! How to distinguish between revenue and capital expenditure Activity 1 – Purchase of new delivery van Murray Traders purchased a new delivery van. The following payments were made when the delivery van was purchased. £ Delivery van 17,400 Insurance of van 860 Adapting shelving to create more storage space 520 First tank of fuel 30 Road fund licence 160 Painting “Murray Traders” and the business logos on the side of the van 220 Required Calculate the total capital expenditure and total revenue expenditure including you workings and then transfer the total amounts to the statements at the end of the exercise. Capital expenditure: Revenue expenditure: The delivery van account should record £___________ (the total capital expenditure) as the cost of the van and the annual depreciation charge should be based on this amount. The revenue expenditure of £___________ should be charged to the profit and loss account at the end of the financial period. Activity 2 – Installation of new equipment