Classify expenditure as assets or expenses Classify the following expenditures as an asset or an expense, and state your reasons why.

1 W Ltd bought three new delivery vans for its distribution team, for a cost of $170 000. Two vans were airconditioned at a cost of $9500, and a two-way radio receiver was installed in one of the vans for $2500.

2 X Ltd bought a new point-of-sale inventory system for $150 000 and trained two employees to use it, at a cost of

$15 000. Two months later, both employees left, and an additional $10 000 was spent training a replacement.

3 Y Ltd has spent $15 000 developing a new product called Clearly. Development is not yet complete. At a recent board meeting, there was evidence that the product is likely to generate future sales and the directors voted to continue development.

4 Z Ltd paid for a piece of equipment to have a regular oil change for $1500, taking place every three years.