Felix Little owns and operates Big Sky Transport Co. During the past year, Felix incurred the…

Felix Little owns and operates Big Sky Transport Co. During the past year, Felix incurred

the following costs related to his 18-wheel truck:

1. Replaced a headlight that had burned out.

2. Replaced fog and cab light bulbs.

3. Installed a television in the sleeping compartment of the truck.

4. Removed the old CB radio and replaced it with a newer model with a greater range.

5. Replaced a shock absorber that had worn out.

6. Installed a wind deflector on top of the cab to increase fuel mileage.

7. Replaced the old radar detector with a newer model that detects the KA frequencies

now used by many of the state patrol radar guns. The detector is wired directly into

the cab, so that it is partially hidden. In addition, Felix fastened the detector to the truck

with a locking device that prevents its removal.

8. Changed engine oil.

9. Replaced the hydraulic brake system that had begun to fail during his latest trip through

the Rocky Mountains.

10. Modified the factory-installed turbo charger with a special-order kit designed to add

50 more horsepower to the engine performance.

Classify each of the costs as a capital expenditure or a revenue expenditure.

 

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