ACCT 201 Chapter Notes - Chapter 9: Ddb Worldwide, Macrs, Intangible Asset
15 Nov 2016
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Capital expenditures they increase company"s investment in ppe. Any material expenditure that will benefit several accounting periods. Charged to asset accounts & recognized as expense in the future. Revenue expenditures charged directly to expense accounts bc there are no objective future benefits or amounts are immaterial (including ordinary repairs) Land all necessary costs incurred in making land ready increase dr. land. Cash purchase price, closing costs (title & attorney fees), real estate brokers" commissions, accrued property taxes. Land improvements all expenditures necessary to make improvements ready for use. Limited useful lives, expense (depreciate) cost of land improvements. Buildings all costs related directly to purchase or construction. Purchase costs: purchase price, closing cost (attorney fees, title insurance), real estate broker"s commission. Remodeling & replacing or repairing wiring, plumbing, floors, etc. Construction costs: contract price & payments for architect fees, building permits. Equipment all costs incurred in acquiring equipment & prepping it.
