UGBA 102A Study Guide - Final Guide: Balance Sheet, Income Statement
9 Sep 2019
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Chapter 8 homework: page 427 q 1,4; page 427-428 mc 2,8; page 434, 436, 438; e8-10; e8- Q1: long-lived assets are non-current assets that are not sold but rather retained by a business for use in normal operations for over one year. Examples include land, plant and equipment, natural resources, and intangibles like patents. Potential future usage incentivizes business to acquire certain long-lived assets, essentially collections of future services that can generate revenue when used over a time period. The cost of the asset is allocated as a periodic expense as those services are employed. Q4: after acquisition, the cost principle is used to record a long-lived asset into the account 50,000: method: units-of-production: (,000 ,000) 300,000 = . 00 per unit of output. It would be best for management to utilize straight-line depreciation if the machine is used evenly throughout its life and its efficiency is expected to decline steadily each period throughout its life.
