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 2015:
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. Cleaned, repacked, and sealed the bearings on the helicopter at a cost of $ 800. This repair is performed annually.
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 2015, 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?