Snowtime Snowboards Inc. (SSI) is a snowboard manufacturer owned solely by Michael Fleming. SSI is a private company that follows ASPE, has a December 31 year end, and prepares adjusting entries annually. Noel Adebayo is the controller for SSI and reports directly to Michael. SSI has reviewed its amortization policies, and it found that a revision needs to be made. In addition, the company has significantly increased its spending on development costs. In past years, SSI expensed development costs, but in Year 4, it has decided to change its accounting policy and instead capitalize expenditures related to development. It is now January Year 5 and Michael has asked for Noel's assistance in making sure that the Year 4 statements reflect these changes. You have been given the following information: Appendix I: Email from Rod Cannon, plant manager Appendix II: Memo from research and development (R&D) department