Founded in 1980, Air Transportation Holding Company operates contract cargo shipping, specializing in small overnight deliveries throughout the eastern United States. The company flies approximately 80 routes, as specified in its contracts with Federal Express. It has hangars and maintenance facilities in North Carolina, Michigan, and South Carolina. The specific assets, liabilities, and subdivisions of stockholders' equity of any business depend on the type of business being operated. Management of Air Transportation Holding Company explained the year's results of operations as follows: Operating expenses increased \(\$ 5,498,000\) ( \(29.9 \%\) ) to \(\$ 23,904,000\) for 1993 compared to 1992 . The increase in operating expenses consisted of the following changes: Cost of flight operations increased \(\$ 2,313,000(25.7 \%)\) as a result of increases in pilot and flight personnel and costs associated with travel and landing fees, which were partially offset by decreased aircraft lease and fuel costs; maintenance expense increased \(\$ 2,850,000(42.9 \%)\) primarily as a result of increases in aircraft parts purchases and mechanic and maintenance personnel costs (due to start-up of satellite maintenance facility and the operation of additional aircraft); the general and administrative expense increase of \(\$ 470,000(17.3 \%)\) resulted from increases in operational and clerical staffing related to expansion of the aircraft fleet operated.

\section*{Instructions}

(a) Recall the definition of an asset. Identify three specific types of assets owned by Air Transportation Holding Company.

(b) The preceding discussion is largely about the operating expenses of the company. Identify five expenses of operations that Air Transportation incurs.

(c) When this company renders service by providing air transportation, what stockholders' equity item is increased?