The correct answer is A. Repairs and painting of an old building.
A capital expenditure is an expenditure that is incurred on an asset that is expected to have a useful life of more than one year. Examples of capital expenditures include the purchase of land, buildings, equipment, and vehicles.
Repairs and painting of an old building are considered to be capital expenditures because they are expected to improve the value of the building and extend its useful life. Repairing and servicing of an old typewriter, retreading of truck tires, and repairing of staircases are all considered to be repairs and maintenance expenses, which are not capital expenditures.
Repairs and maintenance expenses are costs that are incurred to keep an asset in good working condition. These costs are typically expensed in the period in which they are incurred. Capital expenditures, on the other hand, are not expensed in the period in which they are incurred. Instead, they are capitalized and depreciated over the useful life of the asset.
The distinction between capital expenditures and repairs and maintenance expenses is important because it affects the financial statements. Capital expenditures are reported on the balance sheet as assets, while repairs and maintenance expenses are reported on the income statement as expenses. This distinction can have a significant impact on the company’s financial statements, such as its net income and return on assets.