However, Wolfe has expensed all payroll costs, rent costs, and similar costs, which have resulted in a significant loss being reported on the first year's tentative financial statement.
Some of wolfe's accounting staffs wonder whether some of the expensed cost could have been capitalized by a development stage enterprise like Wolfe enterprise. On the other hand, other accounting staff members are concerned that even the legal fees and advertising costs should have been expensed. Overall, the controller is unsure of how to deal with the situation and asks you to research the financial reporting requirements.