$2.$ A vehicle is purchased by ABC Co$.$ The vehicle cost $$35,000$ and has a useful life of $5$ years or $100,000$ miles with a salvage value of $$3,000$ at the end of its useful life. There is a $6$ percent sales tax due on the vehicle upon registration with the Registry of Motor Vehicles, and the registration fee is $$120$ in order to get new plates. Every year a $$75$ dollar license renewal fee is charged by the Registry. After six months, the vehicle is brought to the dealer for a $$75\mathrm{.}00$ oil and filter change. In its six months of operation, it has a flat tire that cost $$35$ to repair. Two years down the road, the engine of the truck seizes and an engine replacement is performed, which cost $$3,000.$

With regard to the above example, which of these expenditures are capitalized, and which are expensed?

The cost of the vehicle

The sales tax

The plate and registration fee

Annual registration fee

The oil and filter change

The flat tire repair

The engine replacement

Solution:

The cost of the vehicle

The sales tax

The plate and registration fee

Annual registration fee

The oil and filter change

The flat tire repair

The engine replacement