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Unformatted text preview: ent account (since no longer have either of these assets!)
Loss on Disposal of Equipment $1,000
Accumulated Depreciation $9,000
$20,000 Natural Resources and Intangibles
Natural Resources: Assets that occur in nature (oil, gas, silver mines, timber, etc.). When acquired or
developed they are recorded at cost, and as the natural resources are "used up" then process of
allocating cost is called depletion (instead of depreciation). Calculated like the units of production
Intangible Assets: Recorded at acquisition cost (only if they have been purchased). If developed
internally by the company, they must expense the costs of developing it (as they are incurred).
• An intangible asset with a definite life (that has been purchased) is amortized over its useful life
(Similar to depreciation, using straight line method, but called amortization if it is an intangible
An intangible asset with an indefinite life (like goodwill) is NOT amortized. But, it is reviewed
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