Question

American Golf Corporation operates golf courses throughout the country. For each of the following items, select whether the cost should be capitalized or expensed. Transactions 1. Purchased a golf course in Orange County, California. 2. Paid a landscaping company to clear 100 acres of land on which to build a new course. 3. Paid a landscaping company to apply fertilizer to the fairways on its Cayote Hills Golf Course. 4. Hired a building maintenance company to build a 2,000-square-foot addition on a clubhouse. 5. Hired a building maintenance company to replace the locks on a clubhouse and equipment shed. 6. Paid an advertising company to create a campaign to build goodwill.

Answer 1

1. Capitalized

2. Capitalized

3. Expensed

4. Capitalized

5. Expensed

6. Expensed