For each of the transactions that follow, indicate whether the cost will be capitalized or expensed by Action Corporation. (Will it be initially treated as an asset/asset addition or will it expensed immediately.)

1) Action paid $50,000 in salaries for research and development on a process in hopes to patent in another year.

2) Action paid $10,000 to have new equipment transported to its business location.

3) Action pays $15,000 to replace a broken part on equipment in the factory. This puts the equipment back into normal operating condition, but does not extend the life of the equipment.

4) Action pays $8,000 to have a new engine added to its truck. This will extend the life of the truck.

A. Expense B. Capitalize