more chap 8 ( mintap)

if a intangable asset has a limited life its cost is expensed over its estimated useful life using

amorization

whats included in cost (examples)

buying, shipping, testing

whats included in cost of machine and equipment (example) (definintion)

everything normal / nessesary to purchase them and perpar for intended use

purchase price, taxes, insurance, transportation, installing , testing

(dose not include damages caused while unpacking)

impairment

permanent diminishment of an assets value

intangalble assets that continue indefinently into bthe future and are not amoritized , the value of these are tested annually for ..

impairment

examples of plant assets

equipment used in operations

building used for operations

amorization

if an intangantble asset has a limited life, its cost is systematically allocated to expense over its useful life.

cost at whitch a comany recorded purchaes of machinery and equipment should include

purchasing price, taxes, instalation , shipping fees

company buys patent on newly devloped tecnology they recognize the cost of this patent

over assets life using amorization expense

prossess of allocation the cost of a plant asset to expense while it is in use is called

depreciation

mid year asset purchase (equation)

(cost - salvage value / usful life) x (how long UL / 12)

change in accounting estimate

change in accounting estimate that results from new info , subquent develpoent or improved judgmnet that impacts current and future periods

we use the new estimate to compute depreciation for current and future periods

whats not considered a ordinaory repair

replacing an engine - anything that adds to its useful life thats not just maintaince

compnay sells machine that cost 7000 for 500 cash , had 6500 accumulated depreciaction is recorded as …

debit accumulated depreciation - machine for 6500

credit to machine for 70000

debit cash for 500

not considered a intangable asset ( tangable)

copy machine/ mineral diposit ( anything phsyical)

accumulated depreciation reported in what financial statment

balance sheet

sale at book value

1) (cost-salvage value / usful life ) = slm

2) slm x years (whats changing ) = depreciation after _ years

3) cost - depreciation =book value

4) book value - new salvage value / remaning useful lives