Exam 3 Review - PPE o Tangible o Currently used in the...

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PPE o Tangible o Currently used in the operations of business o Not held for sale in the ordinary course of business Cost of plant assets (truck) o Cash purchase price o Sales tax o Freight charges o Insurance during transit paid by the purchaser o Cost of lettering on the side of truck o NOT truck license Depreciation o The cost of a long term asset used in the company’s operations is expensed over the time period the asset benefits the company, useful life Book value o Cost of a plant asset-accumulated depreciation Depreciation methods o Straight line method o Declining balance method o Units of activity method (used when the productivity of the assets varies significantly from one period to another) Straight line o Expense is same amount for each year o Depreciable cost is cost of the asset less its residual value (salvage value) o Equations from book Sale of plant assets o Compare the book value of the asset with the proceeds received from the sale o
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Exam 3 Review - PPE o Tangible o Currently used in the...

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