ADM 1340 Lecture Notes - Lecture 9: The Purchase Price, Finance Lease, Operating Lease

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ADM 1340 Full Course Notes
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ADM 1340 Full Course Notes
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Long lived resources that: are controlled by the company, have physical substance, are used in the operaion of a business, are not intended for sale to customers. Purchase price, including taxes and duies, less discounts or rebates. Expenditures necessary to bring asset to its intended locaion and make it ready for its intended use. Operaing expenditures: beneit only the current period, immediately charged against revenue as an expense. Capital expenditures: capitalized as an asset, beneit future periods, increase a company"s investment in producive acivity. Cost of land includes: purchase price, closing costs such as itle and legal fees, addiional costs to prepare land for its intended use. Land has an unlimited life, therefore it is not depreciated. Land improvements: the costs of structural addiions made to land (paving, fencing, these decline in service potenial over ime. All expenditures related to the purchase or construcion of a building.

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