Capital versus Revenue Expenditures

On January 1, 2014, Jose Company purchased a building for $213,000 and a delivery truck for $21,600. The following expenditures have been incurred during 2016:

• The building was painted at a cost of $5,200.
• To prevent leaking, new windows were installed in the building at a cost of $10,100.
• To improve production, a new conveyor system was installed at a cost of $40,900.
• The delivery truck was repainted with a new company logo at a cost of $1,000.
• To allow better handling of large loads, a hydraulic lift system was installed on the truck at a cost of $4,500.
• The truck's engine was overhauled at a cost of $4,100.

Prepare the journal entry to capitalize the conveyor system. How does this entry affect the accounting equation? Indicate the effect on financial statement items by selecting "-" for decrease (or negative effect), "+" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement Journal Income Statement Net Balance Sheet Stockholders' ' = Liabilities + Equity NE NE Date Description Debit Credit Assets Revenues Expenses Income Jan. 1 Building + NE NE NE Cash NE NE NE NE NE Feedback Check My Work Partially correct Prepare the journal entry to capitalize the hydraulic lift. How does this entry affect the accounting equation? Indicate the effect on financial statement items by selecting "-" for decrease (or negative effect), "+" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement Journal Balance Sheet Income Statement Net Stockholders' Equity Date Description Debit Credit Assets = Liabilities + Revenues Expenses Income Jan. 1 Delivery truck x NE NE NE NE NE NEV Cash NE NE NE NE NE