Net adjustment for misclassified capital and revenue expenditures Steps:

• Identify $450 repairs in machinery purchases as revenue expenditure; deduct from non-current assets cost.
• Identify $250 wiring and heating in expenses as capital expenditure; add to non-current assets.
• Identify $45 delivery in carriage inwards as capital expenditure; add to non-current assets.
• Compute net change: -$450 +$250 + $45 = -$155 decrease. Why A is correct:
• Capital expenditures increase asset values while revenue ones decrease them when reclassified, yielding net $155 reduction per accounting principles for fixed asset costing. Why the others are wrong:
• B. $200: Subtracts$250 from $450 but omits$45 addition.
• C. $405: Subtracts only$45 from $450, ignoring$250 addition.
• D. $450: Includes only repairs deduction, ignoring$250 + $45 additions. Final answer: A