ACCT 200 Lecture 24: ACT-200,University of Arizona, Lecture Notes(p24)
30 Aug 2018
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Examples of costs: 1)cash purchase price, 2)closing costs such as title and attorney"s fees, 3)real estate brokers" commissions, and 4)accrued property taxes and other liens on the land assumed by the purchaser. Land improvements driveways, parking lots, fences, landscaping, and underground sprinklers. Expense (depreciate) the cost of land improvements over their useful lives. Buildings includes all costs related directly to purchase or construction. Equipent include all costs incurred in acquiring the equipment and preparing it for use. Process of allocating to expense the cost of a plant asset over its useful life in a rational and systematic manner. Revenue producing ability of assets decreases over time. Types of depreciation method (1)straight-line method (2)declining-balance method (3)units- of-activity method. Straight line formula: (cost - salvage value) / years of useful life.
