Use the following information to answer the question below Nzemaman Local Government incurred the following expenditure in the year 2015. Construction of ma...

Answer Details

The capital expenditure for the local government is D 473,000. Capital expenditure refers to the money spent on acquiring, improving, or maintaining fixed assets, such as land, buildings, equipment, and infrastructure, that are expected to provide economic benefits to the local government for more than one year. From the information given, the items that qualify as capital expenditure are: - Construction of market stalls - Sinking of boreholes - Building of classrooms - Purchase of equipment Therefore, the total capital expenditure for Nzemaman Local Government is: 120,000 (Construction of market stalls) + 0 (Sinking of boreholes - assumed to be financed by government grants or other sources) + 0 (Building of classrooms - assumed to be financed by government grants or other sources) + Purchase of equipment (D 353,000) = D 473,000 The other items of expenditure, such as staff salaries, purchase of stationery, maintenance of vehicles, are revenue expenditures, which are expenses incurred in the normal course of business operations and are charged to the profit and loss account for the year. Hence, the answer is D 473,000.