Principles of Accounting I Chapter 9 Notes - Chapter 9 I Plant Assets 1 Tangible plant assets something you can touch a Property subject to depreciation

Principles of Accounting I Chapter 9 Notes - Chapter 9 I...

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Chapter 9 I. Plant Assets 1) Tangible plant assets – “something you can touch” a) Property subject to depreciation b) Land 2) Intangible assets- “ can’t touch it” Ex: patents, copyrights, trademarks, goodwill 3) Natural Resources Ex: oil, minerals, and timber II. Accountable events in the lives of plant assets 1) Acquisition A) cost of property subject to depreciation include: sales tax, delivery fees, and installation fees Ex: a piece of machinery was purchased for $10,000 with sales tax of $600, and shipping charge of $1,350. The company had to pay to have the machinery installed, which cost $500. The machinery was purchased with a 5 year notes payable, with $200 interest due every year. B) Land costs include: brokers commission, legal fees, delinquent taxes AND fees for surveying, draining, clearing and grading of property. EX: Piece of land is purchased for 200,000. The buyer had to pay a broker $5000 commission. After a survey of the property was completed, the buyer decided to clear the property by knocking down the current building. The surveyor charged $900. Knocking down the building cost $10,500 and building a Casino in its place

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