Plant Assets, Plant assets and equipment, land, land improvements, Building, depreciation, computing depreciation, depreciation methods, straight line, units of activity, depreciation and taxes, plant assets disposal, retirement of plant assets, gain on disposal, lost on disposal, jose cintron, advance business consulting, jose cintron, MBA, mba4help.com, Plant Assets, Plant assets and equipment, land, land improvements, Building, depreciation, computing depreciation, depreciation methods, straight line, units of activity, depreciation and taxes, plant assets disposal, retirement of plant assets, gain on disposal, lost on disposal, jose cintron, advance business consulting, jose cintron, MBA, mba4help.com
Plant Assets, Plant assets and equipment, land, land improvements, Building, depreciation, computing depreciation, depreciation methods, straight line, units of activity, depreciation and taxes, plant assets disposal, retirement of plant assets, gain on disposal, lost on disposal, jose cintron, advance business consulting, mba4help.com
Non-current assets are resources held by a business that will not be converted to cash within one accounting period and include property, plant, equipment, investments, and intangible assets. Non-current assets have a limited life due to factors like wear and tear, technical obsolescence, and commercial obsolescence. Capital expenditures significantly increase the value of a non-current asset while revenue expenditures only maintain an asset's useful life.
This document provides information about various types of current liabilities. It defines current liabilities as debts that are expected to be paid within one year or the normal operating cycle from existing current assets or through creating other current liabilities. Notes payable, accounts payable, accrued expenses like taxes and wages, sales taxes payable, and unearned revenues are provided as examples of current liabilities. The relationship between current liabilities and current assets is also discussed, noting that having more current liabilities could indicate an inability to meet obligations. Specific entries are given to record notes payable, interest payable, repayment of a note, sales taxes, and unearned revenues.
This document discusses non-current assets and depreciation in financial accounting. It defines non-current assets as assets used by a business for more than one accounting period, providing examples like buildings, machinery, and land. It then defines depreciation as the allocation of an asset's original cost over its useful life, reducing its value each year on the balance sheet. Finally, it outlines common methods for calculating depreciation charges, such as the straight-line method and reducing balance method.
Depreciation is allocating the cost of plant and equipment over its useful life. It is a non-cash expense that allows the decreasing value of a capital asset to be deducted from taxes. There are several methods to calculate depreciation including straight-line, units-of-production, and accelerated methods. Partial year depreciation must also be calculated if an asset is placed into service during an accounting period.
Chapter 12 & 14 depreciation of non current assets clcLyLy Tran
This document discusses principles of accounting related to depreciation of non-current assets. It defines depreciation and cost, and describes methods of calculating depreciation including straight-line and reducing balance methods. It compares the two methods and discusses which to use based on the asset. The document also covers depreciation entries, treatment in financial statements, historical cost versus fair value valuation, and revenue recognition principles.
The document discusses key accounting concepts including adjusting entries, the matching principle, prepaid expenses, depreciation, and current and non-current assets. It provides examples of how to record adjusting entries for prepaid insurance and depreciation. It also explains the differences between cash and accrual accounting and how depreciation matches the cost of a non-current asset to the periods that benefit from its use.
Plant Assets, Plant assets and equipment, land, land improvements, Building, depreciation, computing depreciation, depreciation methods, straight line, units of activity, depreciation and taxes, plant assets disposal, retirement of plant assets, gain on disposal, lost on disposal, jose cintron, advance business consulting, mba4help.com
Non-current assets are resources held by a business that will not be converted to cash within one accounting period and include property, plant, equipment, investments, and intangible assets. Non-current assets have a limited life due to factors like wear and tear, technical obsolescence, and commercial obsolescence. Capital expenditures significantly increase the value of a non-current asset while revenue expenditures only maintain an asset's useful life.
This document provides information about various types of current liabilities. It defines current liabilities as debts that are expected to be paid within one year or the normal operating cycle from existing current assets or through creating other current liabilities. Notes payable, accounts payable, accrued expenses like taxes and wages, sales taxes payable, and unearned revenues are provided as examples of current liabilities. The relationship between current liabilities and current assets is also discussed, noting that having more current liabilities could indicate an inability to meet obligations. Specific entries are given to record notes payable, interest payable, repayment of a note, sales taxes, and unearned revenues.
This document discusses non-current assets and depreciation in financial accounting. It defines non-current assets as assets used by a business for more than one accounting period, providing examples like buildings, machinery, and land. It then defines depreciation as the allocation of an asset's original cost over its useful life, reducing its value each year on the balance sheet. Finally, it outlines common methods for calculating depreciation charges, such as the straight-line method and reducing balance method.
Depreciation is allocating the cost of plant and equipment over its useful life. It is a non-cash expense that allows the decreasing value of a capital asset to be deducted from taxes. There are several methods to calculate depreciation including straight-line, units-of-production, and accelerated methods. Partial year depreciation must also be calculated if an asset is placed into service during an accounting period.
Chapter 12 & 14 depreciation of non current assets clcLyLy Tran
This document discusses principles of accounting related to depreciation of non-current assets. It defines depreciation and cost, and describes methods of calculating depreciation including straight-line and reducing balance methods. It compares the two methods and discusses which to use based on the asset. The document also covers depreciation entries, treatment in financial statements, historical cost versus fair value valuation, and revenue recognition principles.
The document discusses key accounting concepts including adjusting entries, the matching principle, prepaid expenses, depreciation, and current and non-current assets. It provides examples of how to record adjusting entries for prepaid insurance and depreciation. It also explains the differences between cash and accrual accounting and how depreciation matches the cost of a non-current asset to the periods that benefit from its use.
This document discusses the classification, cost determination, depreciation, and disposal of non-current assets. It covers the classification of tangible and intangible fixed assets. It discusses how to determine the cost of an asset and various depreciation methods like straight-line, reducing balance, and sum of years digit. The document also discusses disposal methods like retirement, sale, and trade-in of assets. It provides examples of calculating gains and losses on disposal. Finally, it discusses the accounting treatment and types of intangible assets like patents, goodwill, trademarks, and franchises.
This document provides an overview of long-lived tangible and intangible assets. It defines long-lived assets as assets with useful lives longer than one year that are used in operations. It discusses acquisition and capitalization of costs, depreciation methods to allocate costs over the asset's useful life, impairment, disposal, and ratios to analyze long-lived assets. The learning objectives cover defining and classifying long-lived assets, applying the cost principle, depreciation methods, impairment effects, and analyzing acquisition, use and disposal of tangible and intangible long-lived assets.
The document defines assets and discusses the accounting standards for reporting non-current tangible assets. It defines assets according to the IASB framework and outlines the key elements of an asset. Assets are categorized as either current or non-current. Non-current assets are defined and discussed in accordance with IAS 16, including initial cost calculation, recognition criteria, and types of costs included. The objectives and requirements of IAS 16 for property, plant, and equipment are summarized.
1. Capital expenditure is incurred to acquire or improve assets and bring them into working condition, while revenue expenditure maintains assets.
2. Deferred revenue expenditure provides benefits over multiple years, like research costs.
3. Expenses must be classified correctly as capital or revenue for adhering to accounting principles and showing accurate financial results.
Difference between capital expenditure and revenue expenditureSam Catlin
Revenue expenditure provides temporary benefits within the accounting year and does not result in acquisition of an asset. It is recurring and reduces profit. Capital expenditure provides long-term benefits over several years through acquisition or improvement of an asset. It is non-recurring and does not reduce profit. The document uses examples to distinguish between capital and revenue expenditures such as wages, transportation costs, repairs, and improvements to assets.
This document discusses accounting for plant and intangible assets. It covers determining the cost of plant assets, capital vs expense expenditures, depreciation methods including straight-line and declining balance, accounting for disposals and impairments, nature of intangible assets including goodwill, depletion of natural resources, and cash flows from plant transactions.
The document classifies expenditures as capital, revenue, or deferred revenue. Capital expenditures acquire or improve assets that generate benefits for long periods, like machinery or buildings. Revenue expenditures maintain business operations and generate benefits within a year, like wages, rent, materials, and interest payments. The key differences are that capital expenditures create or enhance assets while revenue expenditures maintain assets or operations without creating additional assets.
The document discusses plant assets and depreciation. It defines plant assets as tangible resources used in a business's operations rather than for sale to customers. Plant assets are divided into four classes: land, land improvements, buildings, and equipment. Depreciation is the allocation of the cost of a plant asset over its useful life. There are four generally accepted depreciation methods: straight-line, units-of-production, double-declining balance, and sum-of-the-years'-digits. The straight-line method evenly allocates depreciation over the asset's useful life.
Plant & equipment depreciation and intangible assetsRamila Anwar
This document discusses depreciation and plant and equipment assets over multiple pages. It defines depreciation as allocating the cost of tangible assets over their period of use. It also discusses the matching principle of offsetting revenue with the costs of services provided. The document covers categories of plant and equipment assets, determining their costs, capital vs operating expenditures, disposal of assets, and gains/losses. It also defines intangible assets such as goodwill and patents.
The document discusses accounting for plant assets, natural resources, and intangible assets. It describes how to apply the cost principle to plant assets, explains the concept of depreciation and how to compute it using different methods, and how to account for disposals and revaluations of plant assets. It also covers accounting for natural resource depletion and issues related to intangible assets.
This document discusses depreciation and its key aspects. It defines depreciation as the decline in value of fixed assets like machinery, buildings, vehicles, and furniture due to constant use, time, or obsolescence. Depreciation is a non-cash expense that is allocated over the useful life of the asset to determine accurate profit/loss and financial position. Common depreciation methods include straight line and written down value, which calculate expense differently but both aim to fully write off the asset's value by the end of its life.
This document discusses depreciation, which refers to the reduction in value of fixed assets over time due to usage and age. It defines depreciation and lists assets that are depreciated, such as machinery, furniture, vehicles, and electronics used for business. The objectives and causes of depreciation are outlined. Several depreciation methods are presented, including the straight-line method and written down value method. Examples are provided to illustrate how to calculate depreciation using each method. The advantages and disadvantages of the straight-line and written down value methods are also summarized.
This document discusses capital and revenue expenditures. Capital expenditures are incurred to acquire or improve assets used in business operations. Examples include purchasing machinery. Revenue expenditures are incurred to maintain assets and operate the business, like repairs and salaries. Deferred revenue expenditures provide benefits over multiple years, like research costs. Expenses must be classified correctly for financial reporting purposes like adhering to the matching principle and providing a true and fair view of financial performance.
396
Chapter
Plant Assets, Natural
Resources, and
Intangible Assets
After studying this chapter, you should be
able to:
1 Describe how the cost principle applies
to plant assets.
2 Explain the concept of depreciation.
3 Compute periodic depreciation using
different methods.
4 Describe the procedure for revising
periodic depreciation.
5 Distinguish between revenue and
capital expenditures, and explain the
entries for each.
6 Explain how to account for the disposal
of a plant asset.
7 Compute periodic depletion of natural
resources.
8 Explain the basic issues related to
accounting for intangible assets.
9 Indicate how plant assets, natural
resources, and intangible assets are
reported.
S T U D Y O B J E C T I V E S
Feature Story
The Navigator✓
9
HOW MUCH FOR A RIDE TO THE BEACH?
It’s spring break. Your plane has landed, you’ve finally found your bags, and
you’re dying to hit the beach—but first you need a “vehicular unit” to get
Scan Study Objectives ■
Read Feature Story ■
Read Preview ■
Read text and answer
p. 402 ■ p. 409 ■ p. 412 ■ p. 417 ■
Work Comprehensive p. 421 ■
p. 422 ■
Review Summary of Study Objectives ■
Answer Self-Study Questions ■
Complete Assignments ■
The Navigator✓
Do it!
Do it!
JWCL165_c09_396-443.qxd 8/4/09 9:39 PM Page 396
397
you there. As you turn
away from baggage claim
you see a long row of
rental agency booths.
Many are names you are
familiar with—Hertz, Avis,
and Budget. But a booth
at the far end catches your
eye—Rent-A-Wreck
(www.rent-a-wreck.com).
Now there’s a company
making a clear statement!
Any company that relies
on equipment to generate
revenues must make decisions about what kind of equipment to buy, how
long to keep it, and how vigorously to maintain it. Rent-A-Wreck has decided
to rent used rather than new cars and trucks. It rents these vehicles across
the United States, Europe, and Asia. While the big-name agencies push
vehicles with that “new car smell,” Rent-A-Wreck competes on price. The
message is simple: Rent a used car and save some cash. It’s not a message
that appeals to everyone. If you’re a marketing executive wanting to impress
a big client, you probably don’t want to pull up in a Rent-A-Wreck car. But if
you want to get from point A to point B for the minimum cash per mile, then
they are playing your tune. The company’s message seems to be getting
across to the right clientele. Revenues have increased significantly.
When you rent a car from Rent-A-Wreck, you are renting from an independ-
ent business person who has paid a “franchise fee” for the right to use the
Rent-A-Wreck name. In order to gain a franchise, he or she must meet finan-
cial and other criteria, and must agree to run the rental agency according to
rules prescribed by Rent-A-Wreck. Some of these rules require that each fran-
chise maintain its cars in a reasonable fashion. This ensures that, though you
won’t be cruising down Daytona Beach’s Atlantic Avenue in a Mercedes con-
ver.
Plant assets are physical resources used in business operations that are not intended for sale. They include property, plant, and equipment. Plant assets are recorded at cost and expected to provide services for several years, though land does not decline. Cost includes purchase price, freight, installation, and legal/broker fees. Insurance and license fees are operating expenses rather than asset costs. The cost of a delivery truck was $23,820 including taxes, painting, and a multi-year insurance policy recorded as a prepaid asset.
This document provides an overview of accounting for plant assets, natural resources, and intangible assets according to IFRS. It discusses how to determine the cost of various asset types like land, buildings, equipment, and vehicles. It also explains the concept of depreciation as a method to allocate the cost of plant assets over their useful lives. The document provides examples of accounting entries for purchasing and recording different asset types.
The document discusses cost recovery methods used under tax law to recover the costs of assets over time. It explains concepts of basis, adjusted basis, depreciation, amortization, and depletion. It provides details on determining cost recovery periods and methods for tangible and intangible assets. Examples are given for calculating depreciation of real property and personal property using MACRS tables.
This document summarizes key concepts related to accounting for long-lived assets. It explains that plant assets should be recorded at cost and depreciated over their useful lives using methods like straight-line or declining-balance. Depreciation is allocated to expense the asset's cost over its useful life. When assets are disposed, any difference between book value and proceeds is recorded as a gain or loss. Ratios can evaluate asset usage. Intangible assets with limited lives are amortized, while those with indefinite lives are not.
This document discusses the classification, cost determination, depreciation, and disposal of non-current assets. It covers the classification of tangible and intangible fixed assets. It discusses how to determine the cost of an asset and various depreciation methods like straight-line, reducing balance, and sum of years digit. The document also discusses disposal methods like retirement, sale, and trade-in of assets. It provides examples of calculating gains and losses on disposal. Finally, it discusses the accounting treatment and types of intangible assets like patents, goodwill, trademarks, and franchises.
This document provides an overview of long-lived tangible and intangible assets. It defines long-lived assets as assets with useful lives longer than one year that are used in operations. It discusses acquisition and capitalization of costs, depreciation methods to allocate costs over the asset's useful life, impairment, disposal, and ratios to analyze long-lived assets. The learning objectives cover defining and classifying long-lived assets, applying the cost principle, depreciation methods, impairment effects, and analyzing acquisition, use and disposal of tangible and intangible long-lived assets.
The document defines assets and discusses the accounting standards for reporting non-current tangible assets. It defines assets according to the IASB framework and outlines the key elements of an asset. Assets are categorized as either current or non-current. Non-current assets are defined and discussed in accordance with IAS 16, including initial cost calculation, recognition criteria, and types of costs included. The objectives and requirements of IAS 16 for property, plant, and equipment are summarized.
1. Capital expenditure is incurred to acquire or improve assets and bring them into working condition, while revenue expenditure maintains assets.
2. Deferred revenue expenditure provides benefits over multiple years, like research costs.
3. Expenses must be classified correctly as capital or revenue for adhering to accounting principles and showing accurate financial results.
Difference between capital expenditure and revenue expenditureSam Catlin
Revenue expenditure provides temporary benefits within the accounting year and does not result in acquisition of an asset. It is recurring and reduces profit. Capital expenditure provides long-term benefits over several years through acquisition or improvement of an asset. It is non-recurring and does not reduce profit. The document uses examples to distinguish between capital and revenue expenditures such as wages, transportation costs, repairs, and improvements to assets.
This document discusses accounting for plant and intangible assets. It covers determining the cost of plant assets, capital vs expense expenditures, depreciation methods including straight-line and declining balance, accounting for disposals and impairments, nature of intangible assets including goodwill, depletion of natural resources, and cash flows from plant transactions.
The document classifies expenditures as capital, revenue, or deferred revenue. Capital expenditures acquire or improve assets that generate benefits for long periods, like machinery or buildings. Revenue expenditures maintain business operations and generate benefits within a year, like wages, rent, materials, and interest payments. The key differences are that capital expenditures create or enhance assets while revenue expenditures maintain assets or operations without creating additional assets.
The document discusses plant assets and depreciation. It defines plant assets as tangible resources used in a business's operations rather than for sale to customers. Plant assets are divided into four classes: land, land improvements, buildings, and equipment. Depreciation is the allocation of the cost of a plant asset over its useful life. There are four generally accepted depreciation methods: straight-line, units-of-production, double-declining balance, and sum-of-the-years'-digits. The straight-line method evenly allocates depreciation over the asset's useful life.
Plant & equipment depreciation and intangible assetsRamila Anwar
This document discusses depreciation and plant and equipment assets over multiple pages. It defines depreciation as allocating the cost of tangible assets over their period of use. It also discusses the matching principle of offsetting revenue with the costs of services provided. The document covers categories of plant and equipment assets, determining their costs, capital vs operating expenditures, disposal of assets, and gains/losses. It also defines intangible assets such as goodwill and patents.
The document discusses accounting for plant assets, natural resources, and intangible assets. It describes how to apply the cost principle to plant assets, explains the concept of depreciation and how to compute it using different methods, and how to account for disposals and revaluations of plant assets. It also covers accounting for natural resource depletion and issues related to intangible assets.
This document discusses depreciation and its key aspects. It defines depreciation as the decline in value of fixed assets like machinery, buildings, vehicles, and furniture due to constant use, time, or obsolescence. Depreciation is a non-cash expense that is allocated over the useful life of the asset to determine accurate profit/loss and financial position. Common depreciation methods include straight line and written down value, which calculate expense differently but both aim to fully write off the asset's value by the end of its life.
This document discusses depreciation, which refers to the reduction in value of fixed assets over time due to usage and age. It defines depreciation and lists assets that are depreciated, such as machinery, furniture, vehicles, and electronics used for business. The objectives and causes of depreciation are outlined. Several depreciation methods are presented, including the straight-line method and written down value method. Examples are provided to illustrate how to calculate depreciation using each method. The advantages and disadvantages of the straight-line and written down value methods are also summarized.
This document discusses capital and revenue expenditures. Capital expenditures are incurred to acquire or improve assets used in business operations. Examples include purchasing machinery. Revenue expenditures are incurred to maintain assets and operate the business, like repairs and salaries. Deferred revenue expenditures provide benefits over multiple years, like research costs. Expenses must be classified correctly for financial reporting purposes like adhering to the matching principle and providing a true and fair view of financial performance.
396
Chapter
Plant Assets, Natural
Resources, and
Intangible Assets
After studying this chapter, you should be
able to:
1 Describe how the cost principle applies
to plant assets.
2 Explain the concept of depreciation.
3 Compute periodic depreciation using
different methods.
4 Describe the procedure for revising
periodic depreciation.
5 Distinguish between revenue and
capital expenditures, and explain the
entries for each.
6 Explain how to account for the disposal
of a plant asset.
7 Compute periodic depletion of natural
resources.
8 Explain the basic issues related to
accounting for intangible assets.
9 Indicate how plant assets, natural
resources, and intangible assets are
reported.
S T U D Y O B J E C T I V E S
Feature Story
The Navigator✓
9
HOW MUCH FOR A RIDE TO THE BEACH?
It’s spring break. Your plane has landed, you’ve finally found your bags, and
you’re dying to hit the beach—but first you need a “vehicular unit” to get
Scan Study Objectives ■
Read Feature Story ■
Read Preview ■
Read text and answer
p. 402 ■ p. 409 ■ p. 412 ■ p. 417 ■
Work Comprehensive p. 421 ■
p. 422 ■
Review Summary of Study Objectives ■
Answer Self-Study Questions ■
Complete Assignments ■
The Navigator✓
Do it!
Do it!
JWCL165_c09_396-443.qxd 8/4/09 9:39 PM Page 396
397
you there. As you turn
away from baggage claim
you see a long row of
rental agency booths.
Many are names you are
familiar with—Hertz, Avis,
and Budget. But a booth
at the far end catches your
eye—Rent-A-Wreck
(www.rent-a-wreck.com).
Now there’s a company
making a clear statement!
Any company that relies
on equipment to generate
revenues must make decisions about what kind of equipment to buy, how
long to keep it, and how vigorously to maintain it. Rent-A-Wreck has decided
to rent used rather than new cars and trucks. It rents these vehicles across
the United States, Europe, and Asia. While the big-name agencies push
vehicles with that “new car smell,” Rent-A-Wreck competes on price. The
message is simple: Rent a used car and save some cash. It’s not a message
that appeals to everyone. If you’re a marketing executive wanting to impress
a big client, you probably don’t want to pull up in a Rent-A-Wreck car. But if
you want to get from point A to point B for the minimum cash per mile, then
they are playing your tune. The company’s message seems to be getting
across to the right clientele. Revenues have increased significantly.
When you rent a car from Rent-A-Wreck, you are renting from an independ-
ent business person who has paid a “franchise fee” for the right to use the
Rent-A-Wreck name. In order to gain a franchise, he or she must meet finan-
cial and other criteria, and must agree to run the rental agency according to
rules prescribed by Rent-A-Wreck. Some of these rules require that each fran-
chise maintain its cars in a reasonable fashion. This ensures that, though you
won’t be cruising down Daytona Beach’s Atlantic Avenue in a Mercedes con-
ver.
Plant assets are physical resources used in business operations that are not intended for sale. They include property, plant, and equipment. Plant assets are recorded at cost and expected to provide services for several years, though land does not decline. Cost includes purchase price, freight, installation, and legal/broker fees. Insurance and license fees are operating expenses rather than asset costs. The cost of a delivery truck was $23,820 including taxes, painting, and a multi-year insurance policy recorded as a prepaid asset.
This document provides an overview of accounting for plant assets, natural resources, and intangible assets according to IFRS. It discusses how to determine the cost of various asset types like land, buildings, equipment, and vehicles. It also explains the concept of depreciation as a method to allocate the cost of plant assets over their useful lives. The document provides examples of accounting entries for purchasing and recording different asset types.
The document discusses cost recovery methods used under tax law to recover the costs of assets over time. It explains concepts of basis, adjusted basis, depreciation, amortization, and depletion. It provides details on determining cost recovery periods and methods for tangible and intangible assets. Examples are given for calculating depreciation of real property and personal property using MACRS tables.
This document summarizes key concepts related to accounting for long-lived assets. It explains that plant assets should be recorded at cost and depreciated over their useful lives using methods like straight-line or declining-balance. Depreciation is allocated to expense the asset's cost over its useful life. When assets are disposed, any difference between book value and proceeds is recorded as a gain or loss. Ratios can evaluate asset usage. Intangible assets with limited lives are amortized, while those with indefinite lives are not.
Chapter 10 ASSETS NATURAL RESOURCES AND INTANGIBLE ASSETS.pptJemalSeid25
This document provides an overview and learning objectives for Chapter 10 of a financial accounting textbook. The chapter covers accounting for plant assets, natural resources, and intangible assets. It discusses determining the cost of plant assets, different depreciation methods including straight-line and units-of-activity, accounting for expenditures on assets during their useful lives, disposal of assets, depletion of natural resources, and reporting of these asset types.
The document discusses salvage value, which is the estimated worth of an asset at the end of its useful life. It provides examples to illustrate salvage value calculations and explains how salvage value is used to determine depreciation expenses over an asset's lifetime. Setting the salvage value too high or too low can respectively understate or overstate depreciation and financial reporting. The document also describes an example of salvage value fraud committed by Waste Management to artificially inflate profits.
E8-3E8-3 The ledger of Hixson Company at the end of the current ye.docxjacksnathalie
The document provides information about accounting for long-term assets including plant assets, natural resources, and intangible assets. It discusses how to determine the cost of different types of plant assets such as land, land improvements, buildings, and equipment. It also discusses accounting for natural resources and intangible assets. The document contains examples to illustrate accounting entries for plant asset transactions and financial statement presentation of long-term assets.
This document discusses various concepts and methods of accounting for depreciation. It begins by defining depreciation as the systematic allocation of the cost of a fixed asset over its useful life. It then explains reasons for depreciation such as wear and tear, effluxion of time, obsolescence, and depletion. The document goes on to distinguish between different types of depreciation such as depreciation, depletion, and amortization. It also distinguishes between the straight-line and written down value depreciation methods. The document concludes by providing examples of calculating depreciation under various methods including straight-line, written down value, annuity, machine hour, production units, and depletion.
Fundamentals of Accounting II, Chapter 2 (2).pptxKalkaye
Plant assets include land, land improvements, buildings, equipment, and other long-term tangible assets used in a company's operations. The initial cost of plant assets includes the purchase price plus any additional costs to make the asset ready for use. Companies use depreciation to allocate the cost of plant assets over their estimated useful lives. There are different depreciation methods that can be used, such as straight-line and declining-balance, but the total depreciation expense over the asset's life is the same regardless of method used.
The document discusses accounting for fixed assets and depreciation. It defines fixed assets and lists costs that can be included in the initial cost of acquiring buildings, machinery, equipment, and land. It also discusses capital vs revenue expenditures and how to account for them. The document explains different depreciation methods including straight-line, units-of-production, and double-declining balance. It provides examples of calculating depreciation expense under each method.
This document provides an overview of cost recovery methods used in tax law to recover the costs of assets over time. It discusses the concepts of basis, depreciation, amortization, and depletion. Depreciation allows businesses to deduct the costs of tangible personal and real property. Amortization applies to intangible assets and is deducted over a specific period. Depletion allows natural resources to recover their capital costs. The document provides examples of calculating cost recovery for various asset types.
Companies incur costs to acquire resources that will be used in operations to generate profits. Every
cost creates either an immediate benefit or a future economic benefit. Determining when the
company will realize the benefit from a cost is paramount. When a cost creates an immediate
benefit, such as fuel used in delivery vehicles, the company records the cost in the income statement
as an expense. When a cost creates a future economic benefit, such as purchase of delivery
vehicles to deliver the goods now and later, the company records the cost on the statement of
financial position as an asset.
The document discusses key concepts regarding property, plant, and equipment (PPE) accounting. It defines PPE as long-term tangible assets used in operations to generate revenue. The cost of PPE includes purchase price and expenditures to prepare the asset for use. Interest incurred during construction may be capitalized. PPE is depreciated over its useful life to allocate cost against profits. The document provides examples of costs included in PPE for land, buildings, and equipment.
Ind AS 16 prescribes the accounting treatment for property, plant and equipment. The standard aims to provide information about an entity's investment in property, plant and equipment and the changes in such investment. It covers the recognition and measurement of property, plant and equipment, depreciation, and impairment losses. The principal issues are recognition of assets, determination of carrying amounts, depreciation charges, and impairment losses.
This document provides vocabulary and expressions related to body parts, injuries, and giving medical advice in Spanish. It includes a list of body parts and their Spanish translations, phrases for describing injuries like "I hurt my ____" and "My ____ hurts", verbs like "fall", "twist", and "burn", expressions involving medical care, and questions for asking and giving advice. Examples of filled-in phrases are provided like "My head hurts" and "I cut my elbow". Students are assigned homework to answer why it is important to take care of your body when injured and create flashcards with body part images and translations.
This document provides an overview of auditing and related topics. It defines auditing and describes an auditor's responsibilities to have appropriate competence, comply with ethical standards, and maintain professional skepticism. It distinguishes the roles of accountants and auditors and discusses types of audits. It also covers topics like GAAS, GAAP, the AICPA, ASB, audit opinions, and the purpose of audited financial statements.
The document contains information about audit planning, processes, documentation, evidence, objectives, risk, internal controls, analytical procedures, and a letter of acceptance for an audit. It provides resources and contact information for Jose Cintron and his website mba4help.com which offers information and training related to auditing.
The document discusses various concepts related to auditing, including control risk, inherent risk, detection risk, internal controls, substantive tests, and revenue recognition. It provides definitions and examples for these terms. For instance, it defines control risk as the risk that a misstatement will not be prevented or detected by internal controls. It also gives examples of improper revenue recognition schemes and discusses testing controls related to the revenue cycle.
The document discusses various audit procedures related to testing cash, revenue, expenses, investments, financing, and other cycles. It provides examples of substantive tests that can be performed for balances such as plant assets, long-term debt, and cash. It also describes audit evidence that can be used, including cash disbursement journals, bank reconciliations, canceled checks, and confirmations with customers, lenders, and banks. The document is a reference guide for auditors, outlining the types of tests and evidence applicable for different financial statement line items and cycles.
The document discusses auditing principles and provides an overview of auditing. It notes that auditing is a systematic process of obtaining and evaluating evidence to determine if assertions match established criteria. Auditors aim to provide assurance and attest to the reliability of information. Key aspects of auditing include independence, professional skepticism, compliance with standards, and expressing an opinion to provide confidence to information users. Auditors help satisfy the demand for reliable information needed for decision making in complex business environments.
Accounting, accountant, debits and credits, accounting equation, internal users of accounting, external user of accounting, assets, liabilities, equity, T accounts, natural balance, accounting cycle. Accounting principles, Jose Cintron, MBA, Advance Business Consulting, Jose Cintron, mba4help.com
Physiology and chemistry of skin and pigmentation, hairs, scalp, lips and nail, Cleansing cream, Lotions, Face powders, Face packs, Lipsticks, Bath products, soaps and baby product,
Preparation and standardization of the following : Tonic, Bleaches, Dentifrices and Mouth washes & Tooth Pastes, Cosmetics for Nails.
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...PECB
Denis is a dynamic and results-driven Chief Information Officer (CIO) with a distinguished career spanning information systems analysis and technical project management. With a proven track record of spearheading the design and delivery of cutting-edge Information Management solutions, he has consistently elevated business operations, streamlined reporting functions, and maximized process efficiency.
Certified as an ISO/IEC 27001: Information Security Management Systems (ISMS) Lead Implementer, Data Protection Officer, and Cyber Risks Analyst, Denis brings a heightened focus on data security, privacy, and cyber resilience to every endeavor.
His expertise extends across a diverse spectrum of reporting, database, and web development applications, underpinned by an exceptional grasp of data storage and virtualization technologies. His proficiency in application testing, database administration, and data cleansing ensures seamless execution of complex projects.
What sets Denis apart is his comprehensive understanding of Business and Systems Analysis technologies, honed through involvement in all phases of the Software Development Lifecycle (SDLC). From meticulous requirements gathering to precise analysis, innovative design, rigorous development, thorough testing, and successful implementation, he has consistently delivered exceptional results.
Throughout his career, he has taken on multifaceted roles, from leading technical project management teams to owning solutions that drive operational excellence. His conscientious and proactive approach is unwavering, whether he is working independently or collaboratively within a team. His ability to connect with colleagues on a personal level underscores his commitment to fostering a harmonious and productive workplace environment.
Date: May 29, 2024
Tags: Information Security, ISO/IEC 27001, ISO/IEC 42001, Artificial Intelligence, GDPR
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Training: ISO/IEC 27001 Information Security Management System - EN | PECB
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Article: https://pecb.com/article
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বাংলাদেশের অর্থনৈতিক সমীক্ষা ২০২৪ [Bangladesh Economic Review 2024 Bangla.pdf] কম্পিউটার , ট্যাব ও স্মার্ট ফোন ভার্সন সহ সম্পূর্ণ বাংলা ই-বুক বা pdf বই " সুচিপত্র ...বুকমার্ক মেনু 🔖 ও হাইপার লিংক মেনু 📝👆 যুক্ত ..
আমাদের সবার জন্য খুব খুব গুরুত্বপূর্ণ একটি বই ..বিসিএস, ব্যাংক, ইউনিভার্সিটি ভর্তি ও যে কোন প্রতিযোগিতা মূলক পরীক্ষার জন্য এর খুব ইম্পরট্যান্ট একটি বিষয় ...তাছাড়া বাংলাদেশের সাম্প্রতিক যে কোন ডাটা বা তথ্য এই বইতে পাবেন ...
তাই একজন নাগরিক হিসাবে এই তথ্য গুলো আপনার জানা প্রয়োজন ...।
বিসিএস ও ব্যাংক এর লিখিত পরীক্ষা ...+এছাড়া মাধ্যমিক ও উচ্চমাধ্যমিকের স্টুডেন্টদের জন্য অনেক কাজে আসবে ...
Macroeconomics- Movie Location
This will be used as part of your Personal Professional Portfolio once graded.
Objective:
Prepare a presentation or a paper using research, basic comparative analysis, data organization and application of economic information. You will make an informed assessment of an economic climate outside of the United States to accomplish an entertainment industry objective.
This presentation includes basic of PCOS their pathology and treatment and also Ayurveda correlation of PCOS and Ayurvedic line of treatment mentioned in classics.
How to Add Chatter in the odoo 17 ERP ModuleCeline George
In Odoo, the chatter is like a chat tool that helps you work together on records. You can leave notes and track things, making it easier to talk with your team and partners. Inside chatter, all communication history, activity, and changes will be displayed.
This presentation was provided by Steph Pollock of The American Psychological Association’s Journals Program, and Damita Snow, of The American Society of Civil Engineers (ASCE), for the initial session of NISO's 2024 Training Series "DEIA in the Scholarly Landscape." Session One: 'Setting Expectations: a DEIA Primer,' was held June 6, 2024.
Main Java[All of the Base Concepts}.docxadhitya5119
This is part 1 of my Java Learning Journey. This Contains Custom methods, classes, constructors, packages, multithreading , try- catch block, finally block and more.
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Plant assets/Depreciation
Plan Assets are resources that have three characteristics: Physical
substance, Used in the operations of a business, Not intended for sale to
customers. Also called property, plant, and equipment; plant and
equipment; and fixed assets. These assets are expected to provide
services to the company for a number of years. Except for land, plant
assets decline in service over their useful lives.
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Property plan and Equipment
The cost principle requires that companies record plant assets at cost.
The cost of factory machinery includes the purchase price, freight costs
paid by the purchaser, and installation costs. Once cost is established, the
company uses that amount as the basis of accounting for the plant asset
over its useful life.
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Land
Company acquires real estate at a cash cost of $100,000. The property
contains an old warehouse that is razed at a net cost of $6,000 ($7,500 in
costs less $1,500 proceeds from salvaged materials). Additional
expenditures are the attorney's fee, $1,000, and the real estate broker's
commission, $8,000. Cost of the land is $115,000, computed as follows
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Land improvements
Land improvements are structural additions made to land. Examples are
driveways, parking lots, fences, landscaping, and underground
sprinklers. The cost of land improvements includes all expenditures
necessary to make the improvements ready for their intended use. Ex.
paving, fencing, and lighting.
Land improvements have limited useful lives, and their maintenance and
replacement are the responsibility of the company. Because of their
limited useful life, companies expense
(depreciate) the cost of land improvements
over their useful lives.
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Building
Buildings are facilities used in operations, such as stores, offices,
factories and warehouses. Companies debit to the Buildings account all
necessary expenditures related to the purchase or construction of a
building.
When a building is purchased, such costs include the purchase price,
closing costs (attorney's fees, title insurance, etc.) and real estate broker's
commission. Costs to make the building ready for its intended use
include expenditures for remodeling and replacing or repairing the roof,
floors, electrical wiring, and plumbing.
When a new building is constructed, cost consists of the contract price
plus payments for architects' fees, building permits, and excavation cost.
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Equipment
Equipment includes assets used in operations, such as store check-out
counters, office furniture, factory machinery, delivery trucks, and
airplanes.
Cost includes purchase price, sales taxes, freight charges, and
insurance during transit paid by the purchaser. It also includes
expenditures required in assembling, installing, and testing the unit.
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Individual work
AGM purchases factory machinery at a cash price of
$50,000. Related expenditures are for sales taxes $3,000,
insurance during shipping $500, and installation and testing
$1,000. The cost of the factory machinery is…
Required: Journal entries for the purchase cash and credit.
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Equipment
AGM purchases factory machinery at a cash price of $50,000. Related
expenditures are for sales taxes $3,000, insurance during shipping $500,
and installation and testing $1,000. The cost of the factory machinery is.
Factory Machinery 54,500
Cash 54,500
Or Account payable/note
(To record purchase of factory machine)
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Delivery truck Ej.
Assume that AGM purchases a delivery truck for $15,000 cash, plus
sales taxes of $900 and delivery costs of $500. The buyer also pays $200
for painting and lettering, $600 for an annual insurance policy, and $80
for a motor vehicle license. Explain how each of these costs would be
accounted for.
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Delivery Truck solution
The first four payments ($15,000, $900, $500, and $200) are
expenditures necessary to make the truck ready for its intended use.
Thus, the cost of the truck is $16,600. The payments for insurance and
the license are operating costs and therefore are expensed.
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Individual work
Assume that AGM purchases a delivery truck at a cash price of
$22,000. Related expenditures consist of sales taxes $1,320,
painting and lettering $500, motor vehicle license $80, and a
three-year accident insurance policy $1,600. The cost of the
delivery truck is computed as. Journal entry for the purchase cash.
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Delivery Truck
Assume that AGM purchases a delivery truck at a cash price of $22,000.
Related expenditures consist of sales taxes $1,320, painting and
lettering $500, motor vehicle license $80, and a three-year accident
insurance policy $1,600. The cost of the delivery truck is $23,820
Delivery Truck 23,820
License Expense 80
Prepaid Insurance 1,600
Cash 25,500
(To record purchase of delivery truck and related expenditures)
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Depreciation
Depreciation is the process of allocating to expense the cost
of a plant asset over its useful (service) life. Cost allocation
enables companies to properly match expenses with revenues
in accordance with the matching principle.
It is important to understand that depreciation is a process of
cost allocation. It is not a process of asset valuation.
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Computing Depreciation**
1. Cost. Recall that companies record plant assets at cost, in accordance
with the cost principle.
2. Useful life. Useful life is an estimate of the expected productive life,
also called service life, of the asset. Useful life may be expressed in
terms of time, units of activity (such as machine hours), or units of
output. Useful life is an estimate.
3. Salvage value. Salvage value is an estimate of the asset's value at the
end of its useful life. This value may be based on the asset's worth as
scrap or on its expected trade-in value. Like useful life, salvage value is
an estimate.
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Depreciation Methods
Once a company chooses a method, it should apply it consistently over
the useful life of the asset. Consistency enhances the comparability of
financial statements. Depreciation affects the balance sheet through
accumulated depreciation and the income statement through depreciation
expense.
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Straight-line method
Under the straight-line method, companies expense the same amount of
depreciation for each year of the asset's useful life. It is measured solely
by the passage of time.
Depreciable cost is the cost of the asset less its salvage value
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Units-of-Activity
Under the units-of-activity method, useful life is expressed in terms of
the total units of production or use expected from the asset, rather than as
a time period. The units-of-activity method is ideally suited to factory
machinery.
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Depreciation and Income Taxes
The Internal Revenue Service (IRS) allows corporate taxpayers to deduct
depreciation expense when they compute taxable income. However, the
IRS does not require the taxpayer to use the same depreciation method
on the tax return that is used in preparing financial statements.
Many corporations use a special accelerated-depreciation method on
their tax returns to minimize their income taxes.
Taxpayers must use on their tax returns either the straight-line method or
a special accelerated-depreciation method called the Modified
Accelerated Cost Recovery System (MACRS)
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Individual work
Straight-Line Depreciation
On January 1, 2010, AGM Corp. purchased a new snow-grooming
machine for $50,000. The machine is estimated to have a 10-year life
with a $2,000 salvage value. What journal entry would AGM Corp. make
at December 31, 2010, if it uses the straight-line method of depreciation?
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Solution
The entry to record the first year's depreciation would be:
Dec. 31 Depreciation Expense 4,800
Accumulated Depreciation 4,800
(To record annual depreciation on snow-grooming machine)
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Plant Asset Disposals
Companies dispose of plant assets in three ways—retirement, sale, or
exchange—Whatever the method, at the time of disposal the company
must determine the book value of the plant asset. As noted earlier, book
value is the difference between the cost of a plant asset and the
accumulated depreciation to date.
1.Retirement
2.Sale
3.Exchange
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Retirement of Plant Assets
Retirement of plant assets, assume that Hobart Enterprises retires its
computer printers, which cost $32,000. The accumulated depreciation on
these printers is $32,000. The equipment, therefore, is fully depreciated
(zero book value). The entry to record this retirement is as follows.
Accumulated Depreciation—Printing Equipment 32,000
Printing Equipment 32,000
(To record retirement of fully depreciated equipment)
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Loss on disposal
If a company retires a plant asset before it is fully depreciated, and no
cash is received for scrap or salvage value, a loss on disposal occurs. For
example, assume that Sunset Company discards delivery equipment that
cost $18,000 and has accumulated depreciation of $14,000. The entry is
as follows.
Accumulated DepreciationDelivery Equipment 14,000
Loss on Disposal 4,000
Delivery Equipment 18,000
(To record retirement of delivery equipment at a loss)
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Gain on Disposal
On July 1, 2010, Wright Company sells office furniture for $16,000 cash.
The office furniture originally cost $60,000. As of January 1, 2010, it had
accumulated depreciation of $41,000. Depreciation for the first six
months of 2010 is $8,000. Wright records depreciation expense and
updates accumulated depreciation to July 1 with the following.
July 1 Depreciation Expense 8,000
Accumulated Depreciation—Office Furniture 8,000
(To record depreciation expense for the first 6 months of 2010)
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Gain on Disposal
July 1 Cash 16,000
Accumulated Depreciation—Office Furniture 49,000
Office Furniture 60,000
Gain on Disposal 5,000
(To record sale of office furniture at a gain)
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Loss on Disposal
Assume that instead of selling the office furniture for $16,000, Wright
sells it for $9,000. In this case, Wright computes a loss of $2,000 as
follows
July 1 Cash 9,000
Accumulated Depreciation—Office Furniture 49,000
Loss on Disposal 2,000
Office Furniture 60,000
(To record sale of office furniture at a loss)
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Individual work
Plant Asset Disposal
AGM Trucking has an old truck that cost $30,000, and it has
accumulated depreciation of $16,000 on this truck. AGM has decided to
sell the truck.
(a) What entry would Overland Trucking make to record the sale of the
truck for $17,000 cash?
(b) What entry would Overland trucking make to record the sale of the
truck for $10,000 cash?
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Solution
Cash (sale at gain) 17,000
Accumulated Depreciation—Truck 16,000
Truck 30,000
Gain on Disposal [$17,000 - ($30,000 - $16,000)] 3,000
(To record sale of truck at a gain)
Cash (sale at loss) 10,000
Loss on Disposal [$10,000 - ($30,000 - $16,000)] 4,000
Accumulated Depreciation—Truck 16,000
Truck 30,000
(To record sale of truck at a loss)
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Intangible Assets
Intangible assets are rights ,privileges that result from the
ownership of long life assets.
1. Government grants
2. Goodwill
3. Agreements for franchises and leases.
Examples are:
Microsoft patents, Mc Donald franchises, Apple trade name,
Rent a Wreck trademark.