Horngren 10e SM 08 Chapter

Horngren 10e SM 08 Chapter - CHAPTER 8 COVERAGE OF LEARNING...

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Unformatted text preview: CHAPTER 8 COVERAGE OF LEARNING OBJECTIVES Chapter 8 Long-Lived Assets LEARNING OBJECTIVES QUESTION S EXERCISES PROBLEMS OTHER LO1: Distinguish a companys expenses from expenditures that it should capitalize. 4,5,13,17 28,29,45,46 LO2: Measure the acquisition cost of tangible assets such as land, buildings, and equipment. 3,24,26,27 28,29,30 58,59 LO3: Compute depreciation for buildings and equipment using various depreciation methods. 6,7,8,20 31,32,33,34, 35,36,37,38, 39,40 58,60,64 75 LO4: Recalculate depreciation in response to a change in estimated useful life or residual value. 11 41,47,52 56,57,58,67,74 77 LO5: Differentiate financial statement depreciation from income tax depreciation. 9,10 43 67 LO6: Explain the effect of depreciation on cash flow. 42 61,62,63 78 LO7: Account for expenditures after acquisition. 12 44, 47 66 LO8: Compute gains and losses on the disposal of fixed assets and consider the impact of these gains and losses on the statement of cash flows. 14,18,19 31,32,33,48, 49,50 64,68,69,70,71 LO9: Determine the balance sheet valuation of tangible assets for companies who use the revaluation method allowed under IFRS. 22,27 53 LO10: Account for the impairment of tangible assets. 21,23 54 LO11: Account for intangible assets, including impairment 2,15,16,25 51,52 65,72,73 78 LO12: Explain the reporting for goodwill. 51 LO13: Interpret the depletion of natural resources 2 55 21 CHAPTER 8 8-1 Tangible assets are those that can be seen and touched. Intangible assets are rights or economic benefits that are not physical in nature. 8-2 All three terms refer to an allocation of costs over time. Reduction of intangible assets is generally called amortization. Depreciation is a reduction in buildings and equipment and other tangible assets. Depletion is a reduction in natural resources. 8-3 Cash discounts are reductions in original cost, not income. 8-4 The cost benefit test of record keeping and the concept of materiality. 8-5 When an expenditure is capitalized, it is not credited to stockholders equity. Rather, it becomes an asset with a useful life in excess of 1 year. An asset is debited and generally either cash or a liability is credited. 8-6 Accumulated Depreciation is not cash. If specific cash is being accumulated for the replacement of assets, such cash will be an asset specifically labeled as a Cash Fund for Replacement and Expansion or a Fund of Marketable Securities for Replacement and Expansion. Accumulated Depreciation is the cumulative amount of an assets depreciable value that has been expensed. 8-7 Valuation implies some measure of present market value. In contrast, depreciation is the systematic allocation of the original cost of the asset as an expense on the income statement over the useful life of the asset....
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Horngren 10e SM 08 Chapter - CHAPTER 8 COVERAGE OF LEARNING...

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