State with reasons whether following are Capital or Revenue Expenditures:
(i) Custom duty paid on import of a machinery.
(ii) Wages paid in connection with the erection of a new machinery.
(iii) Rs 5,000 spent on repainting the factory.
(iv) Repairs for Rs 2,000 necessitated by negligence of an operator of machine.
(v) Rs 10,000 paid for electricity bill

Explanation

(i) Custom duty paid on import of a machinery is a Capital Expenditure because it is incurred for the acquisition of a new asset.
(ii) Wages paid in connection with the erection of a new machinery is Capital Expenditure because it is in connection with the acquisition of new asset.
(iii) Rs 5,000 spent on repainting the factory is Revenue Expendilure because it has been incurred to maintain the factory building.
(iv) Repairs for Rs 2,000 necessitated by negligence of an operator of machine is Revenue Expenditure since it has not improved the asset (machine) in any way.
(v) Rs 10,000 paid for electricity bill is Revenue Expendilure because it is a part of operating cost.