230a_ch8 - Depreciation υ What’s the point Allocation...

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Chapter 8: Plant, Property and Equipment, Intangibles Balance Sheet: A = L + SE Assets Cash and Cash Equivalents Accounts Receivables Inventory Gross Plant, Property and Equipment (PPE) Less Accumulated Depreciation Net Plant Property and Equipment Intangibles Liabilities Accounts Payable Debt Stockholders’ Equity Common Stock Paid in Capital Income Statement: Rev – Exp = NI Revenue Cost of Goods Sold Gross Profit Bad Debt Expense Depreciation Expense Amortization Expense Repair Expense Gain on Sale of PPE Loss on Sale of PPE Characteristics of Property, Plant, and Equipment (tangible) Valuation--cost included as asset υ Any cost required to make the asset useable
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FunCo Corporation υ On Jan. 2, FunCo Corp. purchased for cash equipment to mix its paint that cost $180,000. The freight cost associated with its delivery was $12,000 and it cost $8,000 to install it.
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Unformatted text preview: Depreciation υ What’s the point? Allocation across time--Matching costs to revenues υ Unit of production {(Cost – Residual value)/Est. total production}* Actual production υ Straight-line = (Cost– Residual value) * 1/useful life υ Accelerated Methods υ Double Declining Balance { Cost – Accumulated deprecation} * {2/Useful life} υ Tax Depreciation FunCo Corporation • FunCo’s equipment has a useful life of 4 years and a salvage value of $10,000. • What is the depreciable base? (What is the total cost they need to match to revenues over the 4years?) FunCo--journal entries • SL • DDB FunCo--T-accounts FunCo Corporation: Disposal after 3 years Intangibles Goodwill Trademarkds Patents Copyrights Franchises Amortization of Intangibles Impaired Assets...
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230a_ch8 - Depreciation υ What’s the point Allocation...

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