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For each of the transactions that follow, indicate whether the cost will be capitalized or expensed by Action Corporation. (Will it be initially treated as

For each of the transactions that follow, indicate whether the cost will be capitalized or expensed by Action Corporation. (Will it be initially treated as an asset/asset addition or will it expensed immediately.)

1) Action paid $50,000 in salaries for research and development on a process in hopes to patent in another year.

2) Action paid $10,000 to have new equipment transported to its business location.

3) Action pays $15,000 to replace a broken part on equipment in the factory. This puts the equipment back into normal operating condition, but does not extend the life of the equipment.

4) Action pays $8,000 to have a new engine added to its truck. This will extend the life of the truck.

A. Expense B. Capitalize

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