Textbook Notes (270,000)
US (100,000)
JMU (200)
COB (90)
COB 241 (10)
Chapter 8

COB 241 Chapter Notes - Chapter 8: Title Search, Sales Tax, Historical Cost


Department
College of Business
Course Code
COB 241
Professor
James Irving
Chapter
8

This preview shows half of the first page. to view the full 2 pages of the document.
Ch. 8: Accounting for Long Term Operational Assets
Current assets used relatively quickly (inventory/ office supplies) used within a single accounting
period
Long term operational assets used for extended periods of time (equipment or buildings) two or
more accounting periods
Tangible long term assets:
Property, plant, and equipment
o Recognized by depreciation
Natural resources
o Recognized by depletion
Land
Amortization: the term used when recognizing expense for intangible assets with identifiable useful
lives
Historical cost concept: requires that an asset be recorded at the amount paid for it
Buildings:
1. Purchase price
2. Sales tax
3. Title search and transfer document costs
4. Realtor’s and attore’s fees
5. Remodeling costs
Land:
1. Purchase price
2. Sales tax
3. Title search & transfer document costs
4. Realtor’s ad attore’s fees
5. Costs for removal of old buildings
6. Grading costs
Equipment:
1. Purchase price (less discounts)
2. Sales taxes
3. Delivery costs
4. Installation costs
5. Costs to adapt for intended use
Depreciation expense: the amount of a asset’s cost that is allocated to epese durig a accoutig
period
Salvage value: the expected market value of a fully depreciated asset
find more resources at oneclass.com
find more resources at oneclass.com
You're Reading a Preview

Unlock to view full version