COB 241 Lecture Notes - Lecture 11: Intangible Asset, Asset, Ddb Worldwide
26 Oct 2016
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Chapter 8: accounting for long term assets class 1. Long-term assets cycle: acquire funding, dr cash. Cr notes payable (from creditor: buy asset, dr long term asset. Cr cash: use asset, for tangible asset, dr depreciation expense. Cr accumulated depreciation: for intangible asset, dr amortization expense. Cr intangible asset: retire asset, dr cash. Cr long term asset: include gain or loss, dr realized gain, cr realized loss. Buy land and building at once for ,000. Land = 420,000 / (420,000 + 180,000) = . 7 * 500,000 = 350,000. Building = 180,000 / (600,000) = . 3 * 500,000 = 150,000. Straight line method depreciation = (cost salvage value) / useful life. Double declining balance method = double sl rate. 1/years useful = % *2 = ddb rate. Units of production depreciation = ((cost salvage value) / total estimated units of production)
