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Original blog posting (March 10, 2014 )

What costs will be expensed versus capitalized in Applebee’s investment in tableside tablets for its restaurants?. Original blog posting (March 10, 2014 ). Applebee’s is installing Presto tablets by E La Carte at every table.

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Original blog posting (March 10, 2014 )

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  1. What costs will be expensed versus capitalized in Applebee’s investment in tableside tablets for its restaurants? Original blog posting (March 10, 2014)

  2. Applebee’s is installing Presto tablets by E La Carte at every table • Customers will be able to pay their food bill and order appetizers and desserts using the tablets • Also function as jukeboxes and can be used to play games

  3. Data and Assumptions • Each tablet has an initial purchase price of $250 • The annual subscription fee per tablet is $50 • The cost to run wiring to all tables for the tablet is $4,000,000 • The cost of brackets to attach the tablets to the tables is $3,400,000 • Initial training of staff on the use of the tablets $5,000,000 • Additional annual IT costs incurred for tablet maintenance and updates is $225,000 • The useful life of the tablets is four years.  Ignore depreciation and taxes.

  4. Question Which of Applebee’s expenditures for the tablets will be expensed?  Which will be capitalized?

  5. For additional news stories to use in the accounting classroom, see the Accounting in the Headlines blog at http://accountingintheheadlines.com/Related video resources can be found at http://www.youtube.com/user/accountingheadlinesQuestions or comments? Contact Dr. Wendy Tietz at wtietz@kent.edu

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