Slide 9-11 Special Considerations Related interest insurance, and property Equipment taxes are treated as expenses of the current period. Irwin/McGraw-Hill ?The McGraw-Hill Companies, Inc., 1999
?The McGraw-Hill Companies, Inc., 1999 Slide 9-11 Irwin/McGraw-Hill Special Considerations Equipment Related interest, insurance, and property taxes are treated as expenses of the current period
Slide 9-12 Special Considerations Allocation of a Lump-Sum Purchase I think EgI buy the whole thing; barn, land. and animals Irwin/McGraw-Hill ?The McGraw-Hill Companies, Inc., 1999
?The McGraw-Hill Companies, Inc., 1999 Slide 9-12 Irwin/McGraw-Hill Special Considerations I think I抣l buy the whole thing; barn, land, and animals. Allocation of a Lump-Sum Purchase
Slide 9-13 Special Considerations Allocation of a Lump-Sum Purchase The total cost The allocation must be is based on allocated to the relative Fair Market separate accounts for Value of each each asset asset purchased Irwin/McGraw-Hill ?The McGraw-Hill Companies, Inc., 1999
?The McGraw-Hill Companies, Inc., 1999 Slide 9-13 Irwin/McGraw-Hill Special Considerations The total cost must be allocated to separate accounts for each asset. The allocation is based on the relative Fair Market Value of each asset purchased. Allocation of a Lump-Sum Purchase
Slide I Capital Expenditures and Revenue Expenditures Capital Revenue Expenditure Expenditure Any material expenditure Expenditures for ordinary that will benefit several repairs and maintenance accounting periods. To capitalize an To expense an expenditure means to charge expenditure means to charge it to an asset account it to an expense account Irwin/McGraw-Hill ?The McGraw-Hill Companies, Inc, 1999
?The McGraw-Hill Companies, Inc., 1999 Slide 9-14 Irwin/McGraw-Hill Capital Expenditures and Revenue Expenditures To capitalize an expenditure means to charge it to an asset account. Any material expenditure that will benefit several accounting periods. Capital Expenditure To expense an expenditure means to charge it to an expense account. Expenditures for ordinary repairs and maintenance. Revenue Expenditure
Slide 9-15 Depreciation The allocation of the cost of a plant asset to expense in the periods in which services are received from the asset Balance Sheet Cost of Assets plant Plant and assets equipment Income Statement as the services are received Revenues. Expenses: Depreciation Irwin/McGraw-Hill ?The McGraw-Hill Companies, Inc., 1999
?The McGraw-Hill Companies, Inc., 1999 Slide 9-15 Irwin/McGraw-Hill Depreciation The allocation of the cost of a plant asset to expense in the periods in which services are received from the asset. Cost of plant assets Balance Sheet Assets: Plant and equipment Income Statement Revenues: Expenses: Depreciation as the services are received