Class notes
Chapter Nine: Property, Plant and Equipment and Intangibles
- Course
- Institution
- Book
Chapter Nine: Property, Plant and Equipment and Intangibles
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
Seller
Follow
Nixon
Content preview
Chapter Nine: Property, Plant and Equipment and IntangiblesNotes
I. Property, plant and equipment
Non-current assets that are used in the operations of a business and have a
useful life of more than one accounting
The period.
adjusting entry They
would are divided into two
be:
Notice that the appraised value can be
groups:
different than the amount paid The adjusting entry would be:
2021 $1,000,000 $750,000
1. ____Tangible assets____________
202130 Cash : known as
Nov. property, plant and
5,600
equipment (PPE); fixed 30 Accum.
Nov. assets APPRAISED
Dep’n – land,
that include Equip. 14,400PAID
Cash 500 buildings,
7,000 equipment,
Equipment
Accum. Dep’n
machinery, leasehold improvements,
20,000
– Equip.resources.
and natural 14,400
LossGain on Disposal
on Disposal 5,100 1,400
2. __Intangible assets_____________ : lacks physical substance
Equipment 20,000 and
includes patents, copyrights, leaseholds, and trademarks.
II. Cost of PPE
Consistent with the cost principle, PPE are recorded at cost, which
includes all normal and reasonable expenditures necessary to get the asset
in place and ready for its intended use. The cost may include its invoice
price, less any cash discounts, plus freight, unpacking, assembling costs,
non-refundable sales tax (PST), installation, and testing costs.
A. Subsequent Expenditures - when PPE is acquired and put into service,
additional or subsequent expenditures often are incurred after the
acquisition to operate, maintain, repair and improve an asset. These costs
are capitalized or debited to the related capital asset account. Examples
include roofing replacement, plant expansion, and major overhauls of
machinery and equipment.
1 | PLow
a g eCost Asset Purchases: are treated as revenue expenditures and their costs are
directly charged to an expense account at the time of purchase. This practice follows the
materiality principle.
EXAMPLE: QS 9-2 Revenue and capital expenditures LO1
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Nixon. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $0.00. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
64438 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now