Problem 7-4A (Static) Record expenditures after acquisition (LO7-3) Several years ago, Health Services acquired a helicopter for use emergency situations. Required: Select whether Health Services should capitalize or expense each of the following expenditures related to the helicopter delivery operations in the current year: 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 the current year, which increased 15% over the prior year to $9,000. 6. Performed annual maintenance and repairs at a cost of $39,000.

Problem 7-4A (Static) Record expenditures after acquisition (LO7-3) Several years ago, Health Services acquired a helicopter for use in emergency situations. Required: Select whether Health Services should capitalize or expense each of the following expenditures related to the helicopter delivery operations in the current year