An old machine having a marked price of Rs. 1,500 and which was sold for scrap for Rs. 800 was replaced by a new machine at a cost of Rs. 50,000. Which of the following conclusions is correct in this context?
1
The cost of the new machine Rs. 50,000 is a capital expenditure.
2
Rs. 800 received on selling the old machine is a deferred revenue receipt.
3
The cost of the new machine Rs. 50,000 is a revenue expenditure.
4
The cost of the new machine is Rs. 50,000 a deferred revenue expenditure.