Research Case #2 Elephant Accounting Bling-Bling Sisters' Circus ("Bling") is a public entity, based in the United States, which produces a very popular traveling circus show. Bling employs a number of circus performers and uses various animal acts in its shows. In 2014, one of Bling's adult elephants gave birth to a baby elephant, which the circus named Peanut." Bling incurred various costs at the time of Peanut's birth and throughout the first two years of Peanut's life before he began performing with the circus. Some of these costs included the following: (1) veterinary bills associated with his birth, immunizations, etc.. (2) costs to purchase and clear a tract of land for Peanut and the other elephants to spend their time while not on the road, (3) training costs to get Peanut ready to perform in shows, and (4) costs to feed, bathe and maintain Peanut's general health. Because it can be rather expensive to care for an elephant, particularly during its early years, Bling took out a loan to finance the costs associated with Peanut's upbringing until he could begin performing and making Bling some "bling" (SS). Therefore. Bling also incurred interest costs associated with the loan used to pay for Peanut's care and training during the first two years of his life. Finally, in 2016, Peanut debuted in his first performance to a sold-out crowd! He continued to perform to rave reviews for several years thereafter. Although Peanut proved himself very profitable. Bling still incurred various costs associated with the elephant, including costs for food, veterinary bills and grooming. Furthermore, Bling had to pay trainers to teach Peanut new tricks, so he would continue to lure in big crowds. Required: Please answer the following questions regarding how Bling should account for Peanut: (1) Generally speaking, how should Bling classify Peanut within its financial statements (i.e. how would an elephant appear within the financial statements of a circus - what type of an account)? Be sure to discuss at least two alternatives you considered, but "defend the most reasonable position. (2) How should Bling determine the initial value to assign to Peanut? What specific costs should be included in (or excluded from this initial value and why? (3) How should Bling account for the different costs incurred throughout Peanut's life after he has begun performing (food, vet bills, grooming and training)? (Hint: You may have difficulty finding guidance in the Codification for this one. One option is to try using FASB Concepts Statement No. 6. But you'll have to search!)