ACTG 1P12 Lecture : Chapter 5 Notes - class.docx

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burgundyplatypus606

14 Apr 2012

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Aka long lived assets or fixed assets . Official term property, plant and equipment . Businesses often purchase several assets in a lump-sum purchase. Bundle purchases allocate cost based on relative fmv of individual assets. Abc co. acquires a forklift, cutting machine and building for ,000. Estimated fmv of assets: forklift, machine, building, total. Delinquent property taxes property taxes not yet paid when we purchase the land. We agree to pay these and therefore, it is a liability. Land costs are ones that are permanent and have an indefinite useful life. Land improvement costs are ones that are temporary and have a definite life. For example, things such as sprinklers for the lawn, the lighting systems in the parking lot etc. A capital expenditure is an expenditure made to increase the capacity or efficiency of an asset or to extend its useful life.

Related Questions

Following is a classification scheme for a balance sheet. a.current assets b. investments c. property, plant, and equipment d.intangible assets e. current liability f. long term liability g.contributed capital h. retained earnings i. not on balancesheet

For each account name below, select the name of the categoryabove to which it belongs. a. Additional paid-in-capital b. Cost ofGoods Sold c. Retained Earnings d. Land e. Temporary Investments f.Mortgage Payable (due in ten years) g. Common Stock h. Goodwill i.Notes Payable (due in ten months) j. Special Fund for Purchase of aBuilding

silvercicada692

Intangible assets may be internally generated or purchased fromanother party. In either case, the cost that should be included inthe initial valuation of the asset is an issue.

Describe how to determine the cost of several intangible assetsacquired in a basket purchase. Provide a numerical exampleinvolving intangibles being acquired for a total price of$120,000.

Match each of the following accounts to its proper balance sheet classification.

Accounts Payable

Accounts Receivable

Accumulated Depreciation

Buildings Intangible Assets

Cash Long-Term Liabilities

Goodwill Property, Plant, and Equipment

Income Tax Payable Common Stock

Investment in Long-Term Bonds Retained Earnings

Land Current Assets

Inventory Current Liabilities

Patent Long-Term Investment

Supplies

turquoiseeel224

ACTG 1P12 Lecture : Chapter 5 Notes - class.docx

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