**Capital Expenditure**

The sale of an old machine for Rs. 13,000, which originally stood in the books at Rs. 15,000, is considered a capital expenditure.

**Explanation:**

Capital expenditure refers to the expenses incurred on acquiring or improving a long-term asset that will benefit the business for more than one accounting period. In this case, the old machine is considered a long-term asset, and its sale is a capital expenditure for the following reasons:

**1. Long-Term Asset:**

The old machine was initially recorded in the books at Rs. 15,000, indicating that it was a long-term asset used in the business operations. Long-term assets are typically classified as capital assets, and their sale falls under capital expenditure.

**2. Benefit Over Multiple Periods:**

Capital expenditures are made to acquire or improve assets that provide benefits to the business over an extended period. In the case of the old machine, it was used in the business for a significant duration before being sold. Therefore, the initial purchase cost of Rs. 15,000 was considered a capital expenditure.

**3. Enhances Business Value:**

Capital expenditures are aimed at enhancing the value of the business. By acquiring or improving long-term assets like machinery, equipment, or property, a business can increase its production capacity, efficiency, or overall value. In this case, the old machine was likely used to generate revenue for the business, and its sale may have been motivated by the need for an upgraded or more efficient replacement.

**4. Non-Recurring Nature:**

Capital expenditures are typically non-recurring in nature and are not directly related to the day-to-day operations of the business. Unlike revenue or deferred revenue expenditures, which are recurring and necessary for maintaining regular business activities, capital expenditures are one-time investments made to enhance the business's long-term prospects.

**5. Balance Sheet Impact:**

Capital expenditures are reflected on the balance sheet as assets. The initial cost of the old machine would have been recorded as an asset, and its subsequent sale for Rs. 13,000 would result in a decrease in the asset value. The difference between the original cost and the selling price may be recorded as a loss on the income statement.

In conclusion, the sale of the old machine for Rs. 13,000 is considered a capital expenditure because it involved the disposal of a long-term asset that provided benefits to the business over multiple accounting periods and aimed to enhance the business's overall value.

revenue because its lower the face value of machinery