ACC151Chapt8

ACC151Chapt8 - Chapter 8 PLANT ASSETS Tangible in nature...

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Chapter 8 PLANT ASSETS Tangible in nature actively used in operations profit future periods future periods property/plant/equiptment COST DITERMINATION Anything that it takes to get the asset to the door and up and riving? o Purchase price o Acquisition cost of excludes financing charges and discounts o All expenditures needed to prepare the asset for its intended use Steps 1. Acquisition (compute cost) 2. Use (allocate cost to periods, benefited, account for subsequent expenditures) 3. Record disposal LAND AND BUILDINGS Land is not a depreciable asset, but land improvements are Cost of buildings include many costs, the purchase price plus the following: Cost of purchase of construction Brokerage fees Taxes Title fees Attorney fees MACHINERY AND EQUIPTMENT o Purchase price o Installing assembling and testing Insurance while in transit o Transportation charges o Taxes LUMP-SUM ASSET PURCHASE The total cost of a combined purchase of land and building is separated on the basis of their relative market values. On January 1, Matric Inc. purchased land and building for $200,000 cash. The appraised values are $162,500, and
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This note was uploaded on 02/22/2012 for the course ACC 151 taught by Professor Franklin during the Fall '08 term at Syracuse.

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ACC151Chapt8 - Chapter 8 PLANT ASSETS Tangible in nature...

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