Acc200Day12 - A ccy 200 Day 12 o edit M ast er subt it le...

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Click to edit Master subtitle style Accy 200 Day 12 Peter A. Silhan
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Click to edit Master subtitle style CHAPTER 6 Accounting for and Presentation of Property, Plant, and Equipment (PPE) , & Other Noncurrent Assets
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Noncurrent Assets Land Equipment Buildings Intangible Assets Natural Resources © ®
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Property , Plant & Equipment PPE- cost RE: Depr Expense Accumulated Depreciation (contra asset) Cas h Capital Expenditures c r d r c r d r Note: PPE at cost + (AccDepr) = PPE- net contra-asset “credit normal” i.e., “land”, which does not depreciate
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Capital Expenditure (“capex”) Costs of acquiring, constructing, adding, and replacing fixed assets acquiring, constructing costs added to construction in progress account General and admin costs should not be added to PPE
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Obj101 Obj102 Decline in asset value over its useful life Primary Issues for Noncurrent Assets Acquisition Accounting for acquisition of the asset. Use Accounting for depreciation of the asset. Accounting for maintenance and repair costs. Disposal Accounting for the disposition of the asset.
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Land is not depreciated !!! Purchase price Real estate commissions Title insurance premiums Delinquent taxes Razing costs of building on the land Title and legal fees Land All costs incurred to get land ready for use are capitalized .
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GENERAL JOURNAL Date Account Titles and Explanation Debit Credit Land 250,000 Cash 250,000 Land Assume that a company incurs $250,000 to purchase land and get it ready for use in its business.
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