1. What costs at LimeBike, the bike sharing service, would be capitalized versus expensed?
Original blog posting (March 28, 2017)

2. LimeBike Start-up founded in San Mateo, California
Allows for bike sharing without having to return the bike to a docking station
Charges $1 per 30 mins, or $0.50 per ride for students
Operates within cities, independent of government funding
Recently raised $12 million in funding and is set to begin operations in April or May of 2017

3. LimeBike How it works: Locate a bike close by on the LimeBike app
Scan the QR code or enter the bike’s plate number
When finished, park the bike anywhere legal and visible
Press down on the back wheel lock
Trip is finalized and payment processed

4. Question 1
For this question, that LimeBike has officially begun operating its bike sharing program. For each of the following items, identify whether the cost of the item would be expensed or capitalized at LimeBike:
Customized bikes from Trek and Specialized
Development costs of the app for locating, paying, and returning bikes
Salary of the salesperson who works to get cities to adopt Lime Bikes program
Replacement tires for bikes
Routine bike maintenance including chain lubrication, brake pad replacement, and drivetrain cleaning
Electricity and other utilities in the administrative offices

5. Question 2
Why does it matter whether a cost item is expensed or capitalized? Explain.

6. Question Recap
For this question, that LimeBike has officially begun operating its bike sharing program. For each of the following items, identify whether the cost of the item would be expensed or capitalized at LimeBike:
Customized bikes from Trek and Specialized
Development costs of the app for locating, paying, and returning bikes
Salary of the salesperson who works to get cities to adopt Lime Bikes program
Replacement tires for bikes
Routine bike maintenance including chain lubrication, brake pad replacement, and drivetrain cleaning
Electricity and other utilities in the administrative offices
Why does it matter whether a cost item is expensed or capitalized? Explain.

7. For additional news stories to use in the accounting classroom, see the Accounting in the Headlines blog at Questions or comments? Contact Dr. Wendy Tietz at