I:6-15 During November and December of last year, Tommy’s, Inc., incurred the following expenses in investigating the feasibility of opening a new restaurant in town:

Expenses for a market survey $3,800 Expenses to identify potential suppliers of goods $2,000 Expenses to identify a proper location $1,000 Explain the proper treatment of these expenses under the following scenarios:

a. Tommy’s, Inc., already owns another restaurant in town and wants to expand. Tommy’s, Inc. opens the new restaurant in February of the current year.

b. Assume that Tommy’s, Inc. is in the book selling business, and it wants to move into the restaurant business. It opens the restaurant in February of the current year.

c. Same as Part b except Tommy’s decides against opening a restaurant after the investigation.