Classify the following into Capital, Revenue and Deferred Revenue expenditure, stating reasons in each case:(a) A sum of ₹ 32,000 has been spent on a machine as follows: (i) ₹ 20,000 for addition to double the output, (ii) ₹ 5,000 for repairs necessitated by negligence and (iii) ₹ 7,000 for replacement of worn-out parts.(b) Total expenditure on a cinema building during the year was ₹ 2,00,000 out of which 20% related to repairs and 80% represented improvements and additions.(c) Compensation paid to a retrenched employee for the loss of employment.(d) Second-hand furniture worth ₹ 40,000 was purchased and repairing of this furniture cost ₹ 15,000. The furniture was installed by own workmen-wages for this being ₹ 5,000.(e) A person was injured by the motor car of the company. ₹ 10,000 was paid to him by way of compensation.(f) Advertisement expenditure in special advertisement drive.

Classify the following into Capital, Revenue and Deferred Revenue expe

1.	Classify the following into Capital, Revenue and Deferred Revenue expenditure, stating reasons in each case:(a) A sum of ₹ 32,000 has been spent on a machine as follows: (i) ₹ 20,000 for addition to double the output, (ii) ₹ 5,000 for repairs necessitated by negligence and (iii) ₹ 7,000 for replacement of worn-out parts.(b) Total expenditure on a cinema building during the year was ₹ 2,00,000 out of which 20% related to repairs and 80% represented improvements and additions.(c) Compensation paid to a retrenched employee for the loss of employment.(d) Second-hand furniture worth ₹ 40,000 was purchased and repairing of this furniture cost ₹ 15,000. The furniture was installed by own workmen-wages for this being ₹ 5,000.(e) A person was injured by the motor car of the company. ₹ 10,000 was paid to him by way of compensation.(f) Advertisement expenditure in special advertisement drive.
Answer» Classify the following into Capital, Revenue and Deferred Revenue expenditure, stating reasons in each case: (a) A sum of ₹ 32,000 has been spent on a machine as follows: (i) ₹ 20,000 for addition to double the output, (ii) ₹ 5,000 for repairs necessitated by negligence and (iii) ₹ 7,000 for replacement of worn-out parts. (b) Total expenditure on a cinema building during the year was ₹ 2,00,000 out of which 20% related to repairs and 80% represented improvements and additions. (c) Compensation paid to a retrenched employee for the loss of employment. (d) Second-hand furniture worth ₹ 40,000 was purchased and repairing of this furniture cost ₹ 15,000. The furniture was installed by own workmen-wages for this being ₹ 5,000. (e) A person was injured by the motor car of the company. ₹ 10,000 was paid to him by way of compensation. (f) Advertisement expenditure in special advertisement drive.

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