会计学原理英文教学课件：Chapter-10 PLANT ASSETS,NATURAL RESOURCES,AND INTANGIBLES

1、PLANT ASSETS, NATURAL RESOURCES, AND INTANGIBLESChapter 10Called Property, Plant, & EquipmentPLANT ASSETSExpected to Benefit Future PeriodsActively Used in OperationsTangible in NatureC 1Decline in asset value over its useful life Use2. Allocate cost to periods benefited.3. Account for subsequent ex

2、penditures. Disposal 4. Record disposal.PLANT ASSETS Acquisition1. Compute cost.C 1AcquisitionCostAcquisition cost excludes financing charges andcash discounts. All expenditures needed to prepare the asset for its intended usePurchasepriceCOST DETERMINATIONP1Land is not depreciable.PurchasepriceReal

3、 estatecommissionsTitle insurance premiumsDelinquenttaxesSurveyingfeesTitle search and transfer feesLANDP1LAND IMPROVEMENTSParking lots, driveways, fences, walks, shrubs, and lighting systems.Depreciateover useful life of improvements.P1Cost of purchase or constructionBrokeragefeesTaxesTitle feesAtt

4、orney feesBUILDINGSP1PurchasepriceInstalling,assembling, andtestingInsurance whilein transitTaxesTransportationchargesMACHINERY AND EQUIPMENTP1LUMP-SUM ASSET PURCHASE Oakley paid $90,000 cash to acquire a group of items consisting of land appraised at $30,000, land improvements appraised at $10,000,

5、 and a building appraised at $60,000. The $90,000 cost will be allocated on the basis of appraised values as shown:The total cost of a combined purchase of land and building is separated on the basis of their relative fair market values.P1Depreciation is the process of allocating the cost of a plant

6、 asset to expense in the accounting periods benefiting from its use. CostAllocationAcquisitionCost(Unused)Balance Sheet(Used)Income StatementExpenseDEPRECIATIONC2 FACTORS IN COMPUTING DEPRECIATIONThe calculation of depreciation requires three amounts for each asset: Cost Salvage Value Useful LifeC2

7、DEPRECIATION METHODS Straight-line Units-of-production Declining-balance Cost $ 10,000 Salvage value 1,000 Depreciable cost $ 9,000 Useful life Accounting periods 5 years Units inspected 36,000 units Asset we will depreciateP2 STRAIGHT-LINE METHODCost - Salvage ValueUseful life DepreciationExpense f

8、or Period=Cost $ 10,000 Salvage value 1,000 Depreciable cost $ 9,000 Useful life Accounting periods 5 years Units inspected 36,000 units $10,000 - $1,0005 years= $1,800/yearP2 Balance Sheet PresentationMachinery $ 10,000 Less: accumulated depreciation 1,800 $ 8,200 P2 UNITS-OF-PRODUCTION METHODStep

9、2:Depreciation Expense=DepreciationPer UnitNumber of Units Producedin the PeriodDepreciationPer Unit= Cost - Salvage Value Total Units of ProductionStep 1:P2 UNITS-OF-PRODUCTION METHODCost $ 10,000 Salvage value 1,000 Depreciable cost $ 9,000 Useful life Accounting periods 5 years Units inspected 36

10、,000 units DepreciationPer Unit= Cost - Salvage Value Total Units of ProductionStep 1:=$9,00036,000= $025/unitStep 2:Depreciation Expense=DepreciationPer UnitNumber of Units Producedin the Period= $025 7,000 = $1,750Assume that 7,000 units were inspected during 2009. Depreciation would be calculated

11、 as follows:P2 DOUBLE-DECLINING-BALANCE METHODStep 2:Double-declining-balance rate= 2 Straight-line rate = 2 20% = 40%Step 1:Straight-linerate=100 % Useful life = 100% 5 = 20% Step 3:Depreciationexpense=Double-declining-balance rateBeginning periodbook value40% $10,000 = $4,000 for 2009P2 DOUBLE-DEC

12、LINING-BALANCE METHODDepreciation for the PeriodEnd of PeriodBeginningDepreciationDepreciationAccumulatedBookYearBook ValueExpenseExpenseDepreciationValue Initial cost$10,0002009$10,00040%$4,000$4,0006,00020106,00040%2,4006,4003,60020113,60040%1,4407,8402,16020122,16040%8648,7041,29620131,29640%296*

13、9,0001,000* Year 2013 depreciation is $1,296 - $1000 = $296C2 COMPARING DEPRECIATION METHODSA1DEPRECIATION FOR TAX REPORTINGMost corporations use the Modified Accelerated Cost Recovery System (MACRS) for tax purposes. MACRS depreciation provides for rapid write-off of an assets cost in order to stim

14、ulate new investment.A1PARTIAL-YEAR DEPRECIATION When a plant asset is acquired during the year, depreciation is calculated for the fraction of the year the asset is owned.Cost $ 10,000 Salvage value 1,000 Depreciable cost $ 9,000 Useful life Accounting periods 5 years Units inspected 36,000 units A

15、ssume our machinery was purchased on October 1, 2009. Lets calculate depreciation expense for 2009, assuming we use straight-line depreciation.Depreciation = ($10,000 - $1,000) 5 = $1,800 for all 2009Depreciation = $1,800 3/12 = $450C 3So depreciationis an estimate.Predicted salvage valuePredictedus

16、eful lifeCHANGE IN ESTIMATES FOR DEPRECIATION Over the life of an asset, new information may come to light that indicates the original estimates were inaccurate.C 3CHANGE IN ESTIMATES FOR DEPRECIATION Lets return to our machinery and assume that at the beginning of the assets third year, its book va

17、lue is $6,400 ($10,000 cost less $3,600 accumulated depreciation using straight-line depreciation). At that time, it is determined that the machinery will have a remaining useful life of 4 years (instead of the previous estimate of 3 years), and the estimated salvage value will change from $1,000 to

18、 $400.Book value at date of changeSalvage value at date of changeRemaining useful lifeat date of change$6,400 $4004 years= $1,500/yearC 3REPORTING DEPRECIATIONDale Jarrett Racing AdventureOffice furniture and equipment $ 45,386 Shop and track equipment 123,378 Race vehicles and other 775,363 Propert

19、y and equipment, gross 944,127 Less: accumulated depreciation 715,435 Property and equipment, net $ 228,692 C 3ADDITIONAL EXPENDITURES If the amounts involved are not material, most companies expense the item. P3REVENUE AND CAPITAL EXPENDITURESP3Recording cashreceived (debit)or paid (credit).Removin

20、g accumulateddepreciation (debit). Update depreciation to the date of disposal. Journalize disposal by:Removing the asset cost (credit).Recording again (credit)or loss (debit).DISPOSALS OF PLANT ASSETSP4 Update depreciation to the date of disposal. Journalize disposal by:If Cash BV, record a gain (c

21、redit).If Cash BV, record a gain (credit).If Cash BV, record a loss (debit).If Cash = BV, no gain or loss.Next, we calculate the gain or loss on the sale:Finally, we record the sale:P3Total cost,including exploration anddevelopment,is charged todepletion expenseover periodsbenefited.Extracted fromth

22、e naturalenvironmentand reportedat cost lessaccumulateddepletion.NATURAL RESOURCESExamples: oil, coal, goldP5COST DETERMINATION AND DEPLETIONStep 2:DepletionExpense=DepletionPer UnitUnits Extracted and Sold in PeriodDepletionPer Unit= Cost - Salvage Value Total Units of CapacityStep 1:P5DEPLETION OF

23、 NATURAL RESOURCES Consider mineral deposits with an estimated 250,000 tons of available ore. It is purchased for $500,000, and we expect zero salvage value.Depletionper Unit=$500,000 - $0250,000 tons=$2 per tonIf the company extracts and sells 85,000 tons of ore during the year: 85,000 tons $2 per

24、ton = $170,000 depletion expenseP5PLANT ASSETS USED IN EXTRACTINGSpecialized plant assets may be required to extract the natural resource.These assets are recorded in a separate account and depreciated.P5Noncurrent assetswithout physicalsubstance.Useful life isoften difficultto determine.Usually acquired for ope