ul.lst-kix_6111pxyy7hou-7{list-style-type:none}.lst-kix_5814dreliz4k-6 > li{counter-increment:lst-ctn-kix_5814dreliz4k-6}ul.lst-kix_6111pxyy7hou-8{list-style-type:none}ol.lst-kix_5814dreliz4k-0.start{counter-reset:lst-ctn-kix_5814dreliz4k-0 0}ol.lst-kix_a0g63p7ommg4-7.start{counter-reset:lst-ctn-kix_a0g63p7ommg4-7 0}ol.lst-kix_5814dreliz4k-3.start{counter-reset:lst-ctn-kix_5814dreliz4k-3 0}.lst-kix_a0g63p7ommg4-1 > li{counter-increment:lst-ctn-kix_a0g63p7ommg4-1}.lst-kix_a0g63p7ommg4-6 > li:before{content:"" counter(lst-ctn-kix_a0g63p7ommg4-6,lower-latin) ". "}.lst-kix_a0g63p7ommg4-8 > li:before{content:"" counter(lst-ctn-kix_a0g63p7ommg4-8,decimal) ". "}.lst-kix_a0g63p7ommg4-5 > li:before{content:"" counter(lst-ctn-kix_a0g63p7ommg4-5,decimal) ". "}ol.lst-kix_5814dreliz4k-6.start{counter-reset:lst-ctn-kix_5814dreliz4k-6 0}.lst-kix_a0g63p7ommg4-2 > li{counter-increment:lst-ctn-kix_a0g63p7ommg4-2}ol.lst-kix_a0g63p7ommg4-2.start{counter-reset:lst-ctn-kix_a0g63p7ommg4-2 0}.lst-kix_a0g63p7ommg4-7 > li:before{content:"" counter(lst-ctn-kix_a0g63p7ommg4-7,lower-roman) ". "}.lst-kix_a0g63p7ommg4-0 > li:before{content:"" counter(lst-ctn-kix_a0g63p7ommg4-0,lower-latin) ". "}ul.lst-kix_h2l4nwpx6mto-1{list-style-type:none}ul.lst-kix_h2l4nwpx6mto-0{list-style-type:none}ul.lst-kix_h2l4nwpx6mto-3{list-style-type:none}.lst-kix_a0g63p7ommg4-1 > li:before{content:"" counter(lst-ctn-kix_a0g63p7ommg4-1,lower-roman) ". "}ul.lst-kix_h2l4nwpx6mto-2{list-style-type:none}ul.lst-kix_6111pxyy7hou-1{list-style-type:none}ul.lst-kix_h2l4nwpx6mto-5{list-style-type:none}ul.lst-kix_6111pxyy7hou-2{list-style-type:none}ul.lst-kix_h2l4nwpx6mto-4{list-style-type:none}ul.lst-kix_h2l4nwpx6mto-7{list-style-type:none}.lst-kix_a0g63p7ommg4-2 > li:before{content:"" counter(lst-ctn-kix_a0g63p7ommg4-2,decimal) ". "}.lst-kix_a0g63p7ommg4-4 > li:before{content:"" counter(lst-ctn-kix_a0g63p7ommg4-4,lower-roman) ". "}ul.lst-kix_6111pxyy7hou-0{list-style-type:none}ul.lst-kix_h2l4nwpx6mto-6{list-style-type:none}ul.lst-kix_6111pxyy7hou-5{list-style-type:none}ul.lst-kix_6111pxyy7hou-6{list-style-type:none}ul.lst-kix_h2l4nwpx6mto-8{list-style-type:none}ul.lst-kix_6111pxyy7hou-3{list-style-type:none}.lst-kix_a0g63p7ommg4-3 > li:before{content:"" counter(lst-ctn-kix_a0g63p7ommg4-3,lower-latin) ". "}ul.lst-kix_6111pxyy7hou-4{list-style-type:none}ol.lst-kix_a0g63p7ommg4-5.start{counter-reset:lst-ctn-kix_a0g63p7ommg4-5 0}.lst-kix_5814dreliz4k-3 > li{counter-increment:lst-ctn-kix_5814dreliz4k-3}ol.lst-kix_5814dreliz4k-5.start{counter-reset:lst-ctn-kix_5814dreliz4k-5 0}.lst-kix_h2l4nwpx6mto-1 > li:before{content:"- "}.lst-kix_h2l4nwpx6mto-3 > li:before{content:"- "}.lst-kix_h2l4nwpx6mto-0 > li:before{content:"- "}.lst-kix_h2l4nwpx6mto-4 > li:before{content:"- "}.lst-kix_h2l4nwpx6mto-2 > li:before{content:"- "}.lst-kix_a0g63p7ommg4-4 > li{counter-increment:lst-ctn-kix_a0g63p7ommg4-4}.lst-kix_h2l4nwpx6mto-8 > li:before{content:"- "}ol.lst-kix_a0g63p7ommg4-5{list-style-type:none}ol.lst-kix_a0g63p7ommg4-6{list-style-type:none}ol.lst-kix_a0g63p7ommg4-3{list-style-type:none}.lst-kix_5814dreliz4k-4 > li{counter-increment:lst-ctn-kix_5814dreliz4k-4}ol.lst-kix_a0g63p7ommg4-4{list-style-type:none}.lst-kix_h2l4nwpx6mto-5 > li:before{content:"- "}.lst-kix_h2l4nwpx6mto-7 > li:before{content:"- "}ol.lst-kix_a0g63p7ommg4-1{list-style-type:none}ol.lst-kix_a0g63p7ommg4-2{list-style-type:none}ol.lst-kix_a0g63p7ommg4-0{list-style-type:none}.lst-kix_h2l4nwpx6mto-6 > li:before{content:"- "}.lst-kix_5814dreliz4k-8 > li:before{content:"" counter(lst-ctn-kix_5814dreliz4k-8,lower-roman) ". "}ol.lst-kix_5814dreliz4k-4.start{counter-reset:lst-ctn-kix_5814dreliz4k-4 0}.lst-kix_5814dreliz4k-5 > li:before{content:"" counter(lst-ctn-kix_5814dreliz4k-5,lower-roman) ". "}.lst-kix_5814dreliz4k-7 > li{counter-increment:lst-ctn-kix_5814dreliz4k-7}.lst-kix_5814dreliz4k-6 > li:before{content:"" counter(lst-ctn-kix_5814dreliz4k-6,decimal) ". "}.lst-kix_5814dreliz4k-7 > li:before{content:"" counter(lst-ctn-kix_5814dreliz4k-7,lower-latin) ". "}.lst-kix_5814dreliz4k-1 > li:before{content:"" counter(lst-ctn-kix_5814dreliz4k-1,lower-latin) ". "}.lst-kix_5814dreliz4k-0 > li:before{content:"" counter(lst-ctn-kix_5814dreliz4k-0,decimal) ". "}.lst-kix_5814dreliz4k-2 > li:before{content:"" counter(lst-ctn-kix_5814dreliz4k-2,lower-roman) ". "}ol.lst-kix_5814dreliz4k-2{list-style-type:none}ol.lst-kix_5814dreliz4k-3{list-style-type:none}ol.lst-kix_5814dreliz4k-0{list-style-type:none}.lst-kix_5814dreliz4k-4 > li:before{content:"" counter(lst-ctn-kix_5814dreliz4k-4,lower-latin) ". "}ol.lst-kix_5814dreliz4k-1{list-style-type:none}.lst-kix_5814dreliz4k-3 > li:before{content:"" counter(lst-ctn-kix_5814dreliz4k-3,decimal) ". "}ol.lst-kix_a0g63p7ommg4-4.start{counter-reset:lst-ctn-kix_a0g63p7ommg4-4 0}ol.lst-kix_5814dreliz4k-8{list-style-type:none}.lst-kix_5814dreliz4k-0 > li{counter-increment:lst-ctn-kix_5814dreliz4k-0}ol.lst-kix_5814dreliz4k-6{list-style-type:none}ol.lst-kix_5814dreliz4k-7{list-style-type:none}ol.lst-kix_5814dreliz4k-4{list-style-type:none}ol.lst-kix_5814dreliz4k-5{list-style-type:none}.lst-kix_a0g63p7ommg4-7 > li{counter-increment:lst-ctn-kix_a0g63p7ommg4-7}ol.lst-kix_a0g63p7ommg4-3.start{counter-reset:lst-ctn-kix_a0g63p7ommg4-3 0}.lst-kix_5814dreliz4k-1 > li{counter-increment:lst-ctn-kix_5814dreliz4k-1}ol.lst-kix_a0g63p7ommg4-0.start{counter-reset:lst-ctn-kix_a0g63p7ommg4-0 0}.lst-kix_6111pxyy7hou-8 > li:before{content:"- "}.lst-kix_a0g63p7ommg4-5 > li{counter-increment:lst-ctn-kix_a0g63p7ommg4-5}ol.lst-kix_a0g63p7ommg4-7{list-style-type:none}.lst-kix_6111pxyy7hou-5 > li:before{content:"- "}ol.lst-kix_a0g63p7ommg4-8{list-style-type:none}.lst-kix_a0g63p7ommg4-8 > li{counter-increment:lst-ctn-kix_a0g63p7ommg4-8}.lst-kix_6111pxyy7hou-4 > li:before{content:"- "}ol.lst-kix_a0g63p7ommg4-6.start{counter-reset:lst-ctn-kix_a0g63p7ommg4-6 0}.lst-kix_6111pxyy7hou-2 > li:before{content:"- "}.lst-kix_6111pxyy7hou-3 > li:before{content:"- "}ol.lst-kix_5814dreliz4k-2.start{counter-reset:lst-ctn-kix_5814dreliz4k-2 0}.lst-kix_6111pxyy7hou-6 > li:before{content:"- "}.lst-kix_6111pxyy7hou-7 > li:before{content:"- "}ol.lst-kix_a0g63p7ommg4-8.start{counter-reset:lst-ctn-kix_a0g63p7ommg4-8 0}.lst-kix_6111pxyy7hou-0 > li:before{content:"- "}ol.lst-kix_5814dreliz4k-8.start{counter-reset:lst-ctn-kix_5814dreliz4k-8 0}.lst-kix_5814dreliz4k-8 > li{counter-increment:lst-ctn-kix_5814dreliz4k-8}.lst-kix_6111pxyy7hou-1 > li:before{content:"- "}.lst-kix_5814dreliz4k-2 > li{counter-increment:lst-ctn-kix_5814dreliz4k-2}.lst-kix_5814dreliz4k-5 > li{counter-increment:lst-ctn-kix_5814dreliz4k-5}ol.lst-kix_5814dreliz4k-1.start{counter-reset:lst-ctn-kix_5814dreliz4k-1 0}ol.lst-kix_5814dreliz4k-7.start{counter-reset:lst-ctn-kix_5814dreliz4k-7 0}.lst-kix_a0g63p7ommg4-0 > li{counter-increment:lst-ctn-kix_a0g63p7ommg4-0}ol.lst-kix_a0g63p7ommg4-1.start{counter-reset:lst-ctn-kix_a0g63p7ommg4-1 0}.lst-kix_a0g63p7ommg4-3 > li{counter-increment:lst-ctn-kix_a0g63p7ommg4-3}.lst-kix_a0g63p7ommg4-6 > li{counter-increment:lst-ctn-kix_a0g63p7ommg4-6}
Chapter 8Don't forget about the age old question of What is financial security?
We also discuss several other topics like What is physical capital?
Accounting for long term assets
- Plant assets - tangible assets used by a company for more than a year
- 4 main issues in accounting for plants assets:
- Computing the cost (all necessary expenditures for getting the asset in place and ready for its intended use)
- Allocating the costs of most plant assets (less any savage amount) against revenue for the period they benefit
- Accounting for expenditures such as repairs and improvements to plant assets
- Recording the disposal of plant assets
- Depreciation - process of allocating the cost of the plant asset to expense in the accounting periods benefitting from its use; factor determining depreciation are:
- Cost - all renewable expenditures to acquire and prepare
- Salvage value - estimate of assets value at end of period
- Useful life - length of time it is productively used
Straight - line depreciationWe also discuss several other topics like Why determine ancestry?
Units of production depreciation
- Depreciation per unit =
- Depreciation expense = depreciation per unit x units produced in period
We also discuss several other topics like What is a conclusion lim?
QS 8 -1 page 374
Invoice cost $190,000
Electrical work 20,000If you want to learn more check out pom_wm
Delivery 4,000
Sales tax 13,700
Capitalized cost: $227,700If you want to learn more check out bus 310 cal poly
QS 8 - 3
= $15,950 straight - line depreciation method
QS 8 - 6 BV Dep. Ex.
2015 $830,000 $207,500
2016 $622,500 $155,625
2017 $466,875 $116,719
QS 8 - 4
= $319 / concert
2015: 45 concerts x $319 = units on - production depreciation $14,355
QS 8 - 8 page 375
- Capital expenditure, because it's extending the assets useful life
(JE) Equipment 40,000
Cash 40,000
- Revenue expenditure; annual tune up - regular repairs
(JE) maintenance expense 200
Cash 200
- Revenue expenditure; because regularly replacing
(JE) maintenance expense 175
Cash 175
- Capital expenditure, because raised value of building
(JE) building 225,000
Cash 225,000
Chapter 8
Notes continue
EX 8 - 3 page 376 Lump Sum Purchase of Plant Assets
Total cost = purchase price ($375,280) + closing
($395,380) cost($20,100)
Land : $157,040 = 40% x $395,380 = 158,152
Building : $176,670 = 45% x $395,380 = 177,921
Land improvement : 58,890 = 15% x $395,380 = 59,307
$392,600 100% $395,380
(JE)
Date land 158.152
Building 177,921
Land improvement 59.307
Cash 395,380
Example: 8 - 7 page 377 straight - line depreciation
Depreciation Book Value
2015 $32,250 $121,750
2016 $32,250 $89,500
2017 $32,250 $57,250
2018 $32,250 $25,000
$129,000
= $32,250 / year
Example: 8 - 8 page 377 Double Declining Balance Depreciation
Depreciation Book Value
2015 $77,000 $77,000
2016 $38,500 $38,500
2017 $13,500 $25,000
2018 0 $25,000
Only depreciate up to salvage value
S/L rate = 
= 25% x 2 = 50%
Problem 8 - 2A page 380
Don’t depreciate so much that the bV is less than the salvage, if necessary the BV + salvage value may be the same
S/L U/P DDB
Year 1 $59,375 $110,000 $128,750
Year 2 $59,375 $62,300 $64,375
Year 3 $59,375 $60,900 $32,188
Year 4 $59,375 $4,300 $12,187
