Lincoln Driving Academy purchased a used car to use in its driver's education program. Lincoln incurred the following expenses related to the car:
1. Painted the car and fixed a dent on the side of the car at a cost of $2,700. The repairs are considered extensive and increase future benefits.
2. Installed a driver's side brake to be used by the instructor if necessary.
3. Paid the annual registration fees of $120.
4. Performed annual maintenance and repairs at $400.
5. Overhauled the engine at a cost $2,600, increasing the service life of the car by an estimated four years.

Required:
Indicate whether Lincoln should capitalize or expense each of these expenditures. How could Lincoln use expenditures like these to increase reported earnings?