Indicate syp should capitalize or expense expenditures

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Reference no: EM131521438

Question: Stillwater Youth Programs (SYP) purchased a used school bus to use in transporting children for its after-school program. SYP incurred the following expenses related to the bus in 2012:

1. Painted the SYP logo on the bus for $3,000 to help promote the after-school program.

2. Installed new seats on the bus at a cost of $5,000.

3. Installed a DVD player and sound system to entertain the children in-transit and announce upcoming events at a cost of $1,000.

4. Paid insurance on the school bus for 2012, which increased 10% over the prior year to an annual premium of $2,800.

5. Performed annual maintenance and repairs for $1,400.

6. Overhauled the engine at a cost of $6,500, increasing the service life of the bus by an estimated three years.

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

Reference no: EM131521438

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