land is not depreciated because it does not have a definitive or clearly

Land is not depreciated because it does not have a

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land is not depreciated because it does not have a definitive or clearly estimable life, so it is difficult to allocate the cost of land Life Cycle of a Plant Asset 1. Acquisition of asset 2. Usage of asset 3. Disposal of asset 3. Cost Principle: a principle that states that acquired assets and services should be recorded at their actual cost plant assets are recorded at historical cost—the amount paid for the asset
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the actual cost of a plant asset is its purchase price plus taxes, purchase commissions, and all other amounts paid to ready the asset for its intended use Land and Land Improvements The cost of land includes the following amounts paid by the purchaser: Purchase price Brokerage commission Survey and legal fees Delinquent property taxes Taxes assessed to transfer the ownership (title) on the land Cost of clearing the land and removing unwanted buildings The cost of land does not include the following costs: Fencing Paving Sprinkler systems Lighting Signs 4. Land Improvement: a depreciable improvement to land such as fencing, sprinklers, paving, signs, and lighting unlike land, land improvements are subject to depreciation
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Purchase of Land 5. Capitalize: recording the acquisition of land, building, or other assets by debiting (increasing) an asset account Cost of Land Improvements Buildings Constructing a Building Purchasing an Existing Building Architectural fees
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  • Fall '14
  • CarolRowey
  • Depreciation, tangible assets, cost of the asset

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