"You Decide" Essay
You Are Chief Financial Officer for Five

"You Decide" Essay
You are Chief Financial Officer for Five Star Resorts,Inc.You are reviewing the following transactions:
1.Adding a new patio deck to the resort's upscale restaurant,$180,000
2.Painting the ocean side beach houses,$75,000
3.Purchasing additional golf carts,$25,000
4.Rebuilding the engine in the resort's airport shuttle bus,$10,000
5.Replacing the old air conditioning unit in the golf shop with a more efficient one,$20,000
Your accountant has capitalized all of these items and intends to depreciate them over the appropriate asset's remaining useful life as originally estimated.
Indicate whether you agree or disagree with your accountant's treatment of each item.In those cases where you disagree,state the proper treatment of that expenditure.Use the following table:
$\begin{array}{|l|l|l|}\hline & \underline {\text { Agree or } } \\\underline {\text { Expenditure }} & \underline {\text { Disagree? } } & \underline {\text { Proper Treatment, if Disagree } }\\ \hline \text { 1. Adding a new patio deck to the resort's ocean side bar, } \$ 180,000 & & \\\hline \text { 2. P ainting ten ocean front beach houses, } \$ 75,000 & & \\\hline \text { 3. Purchasing additional golf carts for the club house, } \$ 25,000 & & \\\hline \text { 4. Rebuilding the engine in the re sort's cirport shuttle bus, } \$ 10,000 & & \\\hline \begin{array}{l}\text {5. Replacing the pro shop's old air conditioning unit with a more } \\\text { efficient one, } \$ 20,000\end{array} & & \\\hline\end{array}$