TAILIEUCHUNG - Lecture Introduction to Accounting: An integrated approach: Chapter 16 - Penne Ainsworth, Dan Deines

Chapter 16 - Recording and evaluating capital resource process activities: Investing. In this chapter, the learning objectives are: Explain, record, and report long-term asset purchases; describe, record, and report depreciation, depletion, and amortization of long-term assets; discuss, record, and report long-term asset sales, disposals, and trade-ins. | Chapter 16 Recording and Evaluating Capital Resource Process Activities: Investing Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Three Things to Remember Regarding Long-term Assets Record an asset at it’s initial cost. Report the asset at it’s carrying value. Recognize gains/losses when assets are discarded, exchanged (two exceptions), or sold. 16- 16- What is the Cost of Property, Plant, and Equipment? PPE is recorded as the total amount required to obtain and get the asset ready for its intended use Purchase price Costs incurred to obtain (freight, etc.) Cost incurred to setup (installation, etc.) 16- What are the Factors Affecting Depreciation Calculations? Cost Useful life Salvage value Depreciation method 16- How is Depreciation Expense Calculated Using the Different Methods? Straight-line (Cost – salvage value)/Useful life (time) = annual depreciation expense Units-of-production (Cost – salvage value)/Useful life (units) = depreciation rate Depreciation rate * annual usage = annual depreciation expense 16- Depreciation Expense Calculated Using the Different Methods Continued Double-declining balance 2 * straight-line rate = DDB rate DDB * carrying value = annual depreciation expense 16- What is the Company Doesn’t Purchase (or sell) the Asset at the Beginning (or end) of the Year? Units-of-production Multiple the depreciation rate by the actual usage Straight-line or double-declining balance Use the mid-year convention or count the time that the asset was in use 16- How Can a Company Dispose of an Asset Before its Useful Life is Over? Discard Sell Exchange Trade-in 16- What is the Process Involved in Asset Disposals? Record depreciation to date of disposal Remove the cost of the asset and the accumulated depreciation from the records Record the assets received if applicable Record the cash paid if applicable Record the loss incurred if applicable Record the gain if applicable 16-

• Kế toán - Kiểm toán
• Introduction to Accounting
• Business operating activities
• Lecture Introduction to Accounting
• Capital resource process
• Long term assets
• Accounting information systems
• Accounting events
• Financial accounting
• Lecture Financial accounting
• Accounting information
• Management accounting
• Accounting standards
• Accounting equation
• Lecture Introduction to financial accounting
• Financial statements
• Business activities
• Financing activities
• Investing activities
• Business processes
• Lecture Introduction to cost accounting
• Introduction to cost accounting
• Traditional method
• Activity based costing
• Managerial accounting issues
• Accounting method
• Cash basis method
• Accrual method
• Survey of accounting
• Lecture Survey of accounting
• Accounting for cash
• Accounting cycle
• Managerial accounting
• Product costing
• Financial resources
• Accounting provides information
• Lecture Accounting 1
• The Accounting equation
• Operating processes
• Conversion process
• Short term decision making
• Cost volume profit model
• Strategic planning
• Balanced scorecard
• Costs of budgeting
• Human resources
• Payment process
• Evaluating conversion process activities
• Customer support process
• Revenue process
• Time value of money
• Planning investments
• Capital budgeting
• Planning equity financing
• Financial risk