ACCT-2010 Lecture Notes - Lecture 9: Intangible Asset, Sales Tax, Income Statement

• School: Clemson University
• Department: Accounting
• Course: ACCT-2010
• Professor: Martin

Document Summary

Intangibles with a limited life, such as patents and copyrights are subject to amortization. Intangibles with an unlimited (or indefinite) life, such as goodwill and trademarks are not amortized: life-cycle of a long-lived asset, asset acquisition, acquisition cost, asset used to produce revenue, depreciation (tangible) and amortization (intangible) Land: purchase cost, legal fees, surveying fees, brokers commissions, ex buildings, purchase/construction cost, legal fees, appraisal fees, architectural fees, ex. Equipment: purchase/construction cost, sales tax (if we bought it, we owe sales taxes, transportation/freight costs. 10: maintenance costs incurred during use, ordinary repairs and maintenance, relatively small, recurring expenses that maintain normal operating condition (expense recorded when incurred, do not increase productivity, do not extend life beyond original estimate, accounting treatment: expense, ex. Inspect and lubricate machinery, replace fan motor on. Hvac unit: extraordinary repairs, replacements, and additions, relatively large, infrequent expenditures such as major overhauls or replacements of major components, may extend useful life, may increase productivity or efficiency, ex.