BU127 Chapter Notes - Chapter 9: The Purchase Price, Westjet, Fixed Asset
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BU127 Full Course Notes
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Bu127 - reporting and interpreting property, plant, and equipment. Actively used in operations -> expected to benefit future periods. Ratio measures a company"s ability to generate sales given an investment in fixed asset. Costs are capitalized when they are recorded as assets instead of as expenses in the current period. Any sales taxes, legal fees, transportation costs, and installation costs are added to the purchase price of the asset. Special discounts and interest charges associated with the purchase should not be included in the cost of the asset. Acquisition cost: the net cash equivalent amount paid or to be paid for the asset. When non-cash assets are used up as payment, the fair market value of the asset given or asset received, whichever can be more clearly determined. For cash assume that westjet signed a note payable for the aircraft and paid cash for the transportation and preparation costs.
