8 Property, Plant And Equipment ntermediate Accounting Accounting School. Zhongnan
8 Property, Plant And Equipment Accounting School ·Zhongnan University of Economics & Law ntermediate Accounting I 中级会计学
1. Classification as property, plant and equipment To be included in the property, plant, and equipment category an asset must have three characteristics: o The asset must be held for use and not for investment 2 The asset must have an expected life of more than one year 3 The asset must be tangible in nature
Intermediate Accounting 8 Property, Plant And Equipment I. Classification as property, plant and equipment To be included in the property, plant, and equipment category, an asset must have three characteristics: The asset must be held for use and not for investment. The asset must have an expected life of more than one year. The asset must be tangible in nature
rty, Plant And E 2. Acquisition of Property, Plant and Equipment Determination of cost What is the cost of the machine? Devon Company purchases a machine with a contract price of$100,000 on terms of 2/10, n/30 The company does not take the cash discount and incurs transportation costs of $2, 500, as well as installation and testing costs of $3,000. Sales taxes total $5,000 on the purchase. During installation, uninsured damages of $500 are incurred
Intermediate Accounting 8 Property, Plant And Equipment 2. Acquisition of Property, Plant and Equipment Determination of Cost Devon Company purchases a machine with a contract price of $100,000 on terms of 2/10, n/30. The company does not take the cash discount and incurs transportation costs of $2,500, as well as installation and testing costs of $3,000. Sales taxes total $5,000 on the purchase. During installation, uninsured damages of $500 are incurred. What is the cost of the machine?
rty, Plant And E Valuation at Acquisition Cost ofland Contract price Cost of surveys Costs of closing the Clearing and grading transaction, obtaining property to get it ready the title, options, legal for its intended use fees, title search Razing old buildings insurance, past due (net of salvage) taxes
Intermediate Accounting 8 Property, Plant And Equipment Valuation at Acquisition • Contract price • Costs of closing the transaction, obtaining the title, options, legal fees, title search, insurance, past due taxes Cost of Land • Cost of surveys • Clearing and grading property to get it ready for its intended use • Razing old buildings (net of salvage)
Valuation at Acquisition Cost ofland Improvements Landscaping Streets · Sidewalks · Sewers
Intermediate Accounting 8 Property, Plant And Equipment • Landscaping • Streets • Sidewalks • Sewers Cost of Land Improvements Valuation at Acquisition