HnH Solutions acquired a machine by making the following payments:

Net cash price Rs. 116,000 including 16% Sales tax; Carriage in Rs. 6,000; Insurance in transit Rs. 5,000; Fire insurance for the next 4 years Rs. 8,000; Installation charges Rs. 20,000; Overhauling Charges (Before Use); Charges to repair the damage caused during installation Rs. 2,000.

REQUIRED:

1)Classify the above payments into capital expenditures and revenue expenditures.

(2 Marks)

Give and entry to record acquisition of machine, and another entry to record expenditures by Debiting General Expenses Account.