BUSI 2160U Lecture 3: Capital Assets
Document Summary
Criteria of recognition of ppe/long term asset (tangible: probable future economic benefit will flow to company (greater than 1 year, can be measured reliably. Watch ca1 - ca6 videos (lecture) and make notes. Also read the chapter to better understand the material. Calculating depreciation: straight line and accelerated: gain = 60,000 - 30,000 = ,000. Db = 100,000 0. 20 = 20,000 is the first year depreciation expense. Db = 80,000 0. 20 = 16,000 is the second year depreciation expense. Db = 64,000 0. 20 = 12,800 is the third year depreciation expense. Db = 51,200 0. 20 = 10,240 is the fourth year depreciation expense. Db = 40,960 0. 20 = 8,192 is the fifth year depreciation expense: = 100,000 - 67,232 = 32,768, gain = 32,768 - 30,000 = 2,768. In - class question - problem 2 (challenging) *subtract the used years by the years that have already been used up*
