Assets are the cornerstone of financial reporting; often it is unclear whether an expenditure is an asset or an expense. For each of the transactions described below, consider if the expenditure should be recorded as an asset or as an expense. Be sure to include a discussion of the specific criteria in your response. Assume all items are material.
(a) Akamu Corp. pays legal fees of $2,500 in purchasing land to be used as a parking lot.
(b) Luca, Inc. pays $7,000 to pave the driveway to its office building.
(c) On January I, Alan & Cheng, Chartered Accountants, pays six months' office rent to cover the month of January and the next five months.
(d) Mattamy Inc. pays $190,000 to workers for construction of a building to be used as its corporate headquarters.
(e) Pharma Inc. incurs legal fees of $5,500 for registering a patent for its product.
(f) Delhi's Florists pays wages of $2, 100 for November to an employee who drives its delivery truck.
(g) Delhi's Florists pays $4,500 for flowers to be delivered to its premises.