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

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Chapter 9I.Plant Assets1)Tangible plant assets– “something you can touch”a)Property subject to depreciationb)Land2)Intangible assets-“ can’t touch it”Ex: patents, copyrights, trademarks, goodwill3)Natural ResourcesEx: oil, minerals, and timberII.Accountable events in the lives of plant assets1)AcquisitionA)cost of property subject to depreciation include: sales tax, delivery fees, andinstallation feesEx: a piece of machinery was purchased for $10,000 with sales tax of $600, andshipping 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 forsurveying, draining, clearing and grading of property.EX: Piece of land is purchased for 200,000. The buyer had to pay a broker $5000commission. After a survey of the property was completed, the buyer decided toclear the property by knocking down the current building. The surveyor charged

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Chapter 11 / Exercise E11-2
Intermediate Accounting: Reporting and Analysis
Jones/Wahlen
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Intermediate Accounting: Reporting and Analysis
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Chapter 11 / Exercise E11-2
Intermediate Accounting: Reporting and Analysis
Jones/Wahlen
Expert Verified

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