tailieunhanh - Lecture Fundamental accounting principles (19/e) - Chapter 10: Plant assets, natural resources, and intangibles

After completing this chapter you should be able to: Explain the cost principle for computing the cost of plant assets; explain depreciation for partial years and changes in estimates; distinguish between revenue and capital expenditures, and account for them. | PLANT ASSETS, NATURAL RESOURCES, AND INTANGIBLES Chapter 10 Chapter 10: Plant Assets, Natural Resources, and Intangibles. Called Property, Plant, & Equipment PLANT ASSETS Expected to Benefit Future Periods Actively Used in Operations Tangible in Nature C 1 Plant assets are tangible assets that are used actively in the operations of the entity. We fully expect these assets, sometimes referred to as property, plant, and equipment, to benefit more than one accounting period. Decline in asset value over its useful life Use 2. Allocate cost to periods benefited. 3. Account for subsequent expenditures. Disposal 4. Record disposal. PLANT ASSETS Acquisition 1. Compute cost. C 1 When we acquire a plant asset, it is recorded at its historical cost. We will see how cost is determined on the next slide. Once the asset is placed in service, we will allocate a portion of the asset’s cost to depreciation expense as the asset becomes older. Finally, at the end of the asset’s useful life, we will dispose of it and remove it from our books and records. The accounting for plant assets usually covers several accounting periods. Acquisition Cost Acquisition cost excludes financing charges and cash discounts. All expenditures needed to prepare the asset for its intended use Purchase price COST DETERMINATION P1 The cost of a plant asset includes the purchase price as well as all costs necessary to get the asset in place and ready for its intended use. We record the purchase price net of any cash discounts available. We will add freight, unpacking, assembling, installing, and testing costs to the net invoice price to arrive at final cost. Finance charges are not included in the cost of an asset. If we elect to finance the purchase over a period of time, the interest cost is charged as an expense when incurred. LUMP-SUM ASSET PURCHASE Oakley paid $90,000 cash to acquire a group of items consisting of land appraised at $30,000, land improvements appraised at $10,000, and a . | PLANT ASSETS, NATURAL RESOURCES, AND INTANGIBLES Chapter 10 Chapter 10: Plant Assets, Natural Resources, and Intangibles. Called Property, Plant, & Equipment PLANT ASSETS Expected to Benefit Future Periods Actively Used in Operations Tangible in Nature C 1 Plant assets are tangible assets that are used actively in the operations of the entity. We fully expect these assets, sometimes referred to as property, plant, and equipment, to benefit more than one accounting period. Decline in asset value over its useful life Use 2. Allocate cost to periods benefited. 3. Account for subsequent expenditures. Disposal 4. Record disposal. PLANT ASSETS Acquisition 1. Compute cost. C 1 When we acquire a plant asset, it is recorded at its historical cost. We will see how cost is determined on the next slide. Once the asset is placed in service, we will allocate a portion of the asset’s cost to depreciation expense as the asset becomes older. Finally, at the end of the asset’s useful life,

• Kế toán - Kiểm toán
• Accounting principles
• Fundamental accounting principles
• Lecture Fundamental accounting principles
• Plant assets
• Natural resources
• Intangible assets
• Accounting information systems
• Fundamental system principles
• Technology based accounting systems
• Accounting information
• Financial accounting
• Managerial accounting
• Managerial cost
• Reporting manufacturing activities
• Merchandising operations
• Accounting cycle
• Completing the accounting cycle
• Classified balance sheet
• Accounting for partnerships
• Partnership form of organization
• Basic partnership accounting