Cook CoIncurred the Following Costs Related to the Office Building Used

question 45

Essay

Cook Co.incurred the following costs related to the office building used in operating its sports supply company:
(a)Replaced a broken window.
(b)Replaced the roof that had been on the building for 23 years.
(c)Serviced all the air conditioners before summer started.
(d)Replaced the air conditioners with refrigerated air conditioners in the customer service areas.
(e)Added a warehouse to the back of the building.
(f)Repainted the interior walls.
(g)Installed window shutters on all windows.
Classify each of the costs as a capital expenditure or a revenue expenditure.

---

Definitions:

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent accounts, preparing the books for the next period.

Depreciation Expense

This is an accounting method used to allocate the cost of a tangible asset over its useful life.

Salaries and Wages Expense

The total cost incurred by an employer for employee compensation, including both salaries and hourly wages.

Temporary Account

An account that is closed at the end of each accounting period and its balances transferred to permanent accounts; examples include revenues, expenses, and dividends accounts.