How could health services use expenditures

Reference no: EM131521297

Question: Several years ago, Health Services acquired a helicopter for use in emergency situations. Health Services incurred the following expenditures related to the helicopter delivery operations in 2012:

1. Overhauled the engine at a cost of $7,500. Health Services estimated the work would increase the service life for an additional five years.

2. Painted the Health Services company logo on the helicopter at a cost of $6,000.

3. Added new emergency health equipment to the helicopter for $25,000.

4. Modified the helicopter to reduce cabin noise by installing new sound barrier technology at a cost of $15,000.

5. Paid insurance on the helicopter for 2012, which increased 15% over the prior year to $9,000.

6. Performed annual maintenance and repairs at a cost of $39,000.

Required: Indicate whether Health Services should capitalize or expense each of these expenditures. How could Health Services use expenditures like these to increase reported earnings?

Reference no: EM131521297

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