ADM 1340 Study Guide - Final Guide: Interest Expense, Dividend Yield, Asset
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Determining the cost of property, plant and equipment. Reporting and analyzing long- lived assets. Adm1340 exam review 1. 2 adm1340 exam review. Cost: the purchase price plus all necessary costs to make the asset ready for its intended use. Useful life: an estimate of the period over which an asset is expected to be available for use. Depreciation is generally calculated using one of these three methods: straight- line, diminishing- balance, units- of- production. Example: a delivery van was bought on jan. 1, 2012. Estimated useful life: 5 years/100,000km. Adm1340 exam review 3. Units- of- production method: significant components, may be depreciated separately. Retirement: equipment is scrapped or discarded. Exchange: existing equipment is traded for new equipment. Disposal of property, plant, and equipment. 4 adm1340 exam review. Step 2: calculate carrying amount. Proceeds > carrying amount = gain (cr. ) Proceeds < carrying amount = loss (dr. : remove cost of asset and accumulated depreciation.