Mgmt_200_Spring_2008_Chap_8_PP&E(2,29)

Mgmt_200_Spring_2008_Chap_8_PP&E(2,29) - Long-term...

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Long-term operating assets Property, Plant, and Equipment (Tangible assets) Natural resources (e.g. mineral resources) Intangible assets: Patents, copyrights, etc Specialized assets (e.g. Films)
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E 8-1: Preparing a Classified Balance Sheet The following is a list of account titles and amounts (dollars in millions) reported by Hasbro, Inc., a leading manufacturer of games, toys, and interactive entertainment software for children and families: Required: Prepare the asset section of the balance sheet for Hasbro, Inc., classifying the assets into Current Assets, Property, Plant, and Equipment (net), and Other Assets.
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Long-term operating assets Measurement of cost Historical cost Post acquisition expenditures Record cost of using Allocation of cost Alternative allocation methods Depreciation expense Book value = Cost – Accumulated depreciation Disposal of assets Gain or loss on disposal
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Measurement of cost Acquisition costs Legal fees, shipping costs, installation costs Renovation expenditures Self-constructed assets Capitalized interest Payment other than cash Shares of stock Exchanges Basket Purchases Allocation to individual assets (Fair values) Post-acquisition costs Ordinary repairs and Maintenance Additions and improvements
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Allocation of cost Depreciation is the process of allocating the cost of long-term assets over their productive lives in a systematic and rational manner Depreciation expense $800 Accumulated depreciation $800 Depreciation expense Accumulated Depreciation Net Book value
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Depreciation Expense Method Straight-line Units-of-production Double declining balance (Accelerated) Acquisition cost Estimated economic life Estimated residual value
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Straight-line Method Depreciation expense: = Cost – Estimated residual value Economic life
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This note was uploaded on 11/22/2009 for the course MGMT 200 taught by Professor Greigg during the Spring '08 term at Purdue.

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Mgmt_200_Spring_2008_Chap_8_PP&E(2,29) - Long-term...

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