Question

In the following case, indicate the amount to be debited as Capital Expenditure and Revenue Expenditure:

A total expenditure of ₹ 50,000 was incurred on factory buildings, out of this 20% related to repairs and 80% related to extensions.

Answer 1

Capital ₹ 40,000 (50,000 × 80%), Revenue ₹ 10,000 (50,000 × 20%).