中级财务会计英文ch06

Chapter6-1Property,Plant,andEquipmentChapter6IntermediateAccounting12thEditionKieso,Weygandt,andWarfieldPreparedbyCobyHarmon,UniversityofCalifornia,SantaBarbaraChapter6-21.Recordtheacquisitionofproperty,plant,andequipment.2.Determinethecostofassetsacquiredbytheexchangeofotherassets.3.Computethecostofaself-constructedasset,includinginterestcapitalization.4.Recordcostssubsequenttoacquisition.5.Recordthedisposalofproperty,plant,andequipment.6.Understandthedisclosuresofproperty,plant,andequipment.7.Explaintheaccountingforoilandgasproperties.(appendix)LearningObjectivesChapter6-38.Identifythefactorsinvolvedindepreciation.9.Explainthealternativemethodsofcostallocation,includingactivityandtime-basedmethods.10.Recorddepreciation.11.Explaintheconceptualissuesregardingdepreciationmethods.12.Understandthedisclosureofdepreciation.13.Understandadditionaldepreciationmethods,includinggroupandcompositemethods.14.Computedepreciationforpartialperiods.15.Explaintheimpairmentofnoncurrentassets.16.Understanddepreciationforincometaxpurposes.17.Explainchangesandcorrectionsofdepreciation.18.Understandandrecorddepletion.LearningObjectivesChapter6-4ActivelyUsedinOperationsExpectedtoBenefitFuturePeriodsTangiblePhysicalSubstanceIntangibleNoPhysicalSubstanceOperationalAssetsChapter6-5ExpectedtoBenefitFuturePeriodsActivelyUsedinOperations•AssetssubjecttodepreciationBuildingsandequipmentFurnitureandfixtures•NaturalresourceassetssubjecttodepletionMineraldepositsandtimber•LandExamplesTangiblePhysicalSubstanceOperationalAssetsChapter6-61.Theassetmustbeheldforuseandnotforinvestment.2.Theassetmusthaveanexpectedlifeofmorethanoneyear.3.Theassetmustbetangibleinnature.Tobeincludedintheproperty,plant,andequipmentcategory,anassetmusthavethreecharacteristics:CharacteristicsofProperty,Plant,andEquipmentChapter6-7ActivelyUsedinOperationsExpectedtoBenefitFuturePeriods•ValuerepresentedbyrightsthatproducebenefitsGoodwillPatentsCopyrightsTrademarks•AssetssubjecttoamortizationExamplesIntangibleNoPhysicalSubstanceOperationalAssetsChapter6-8GeneralRuleThehistoricalcostofacquiringanassetincludesthecostsnecessarilyincurredtobringittotheconditionandlocationnecessaryforitsintendeduse.AcquisitionCostChapter6-9ContractpriceRemodelingandreconditioningExcavatingforthespecificbuildingArchitecturalandbuildingpermitcostsCapitalizedinterestCertainunanticipatedcostsCostofBuildingsAcquisitionofProperty,Plant,andEquipmentChapter6-10InstallationcostsNetpurchasepriceModificationtobuildingnecessarytoinstallequipmentTransportationcostsCostofMachinery,Furniture,andFixturesAcquisitionofProperty,Plant,andEquipmentChapter6-11ContractpriceCostsofclosingthetransaction,obtainingthetitle,options,legalfees,titlesearch,insurance,pastduetaxesCostofLandCostofsurveysClearingandgradingpropertytogetitreadyforitsintendeduseRazingoldbuildings(netofsalvage)AcquisitionofProperty,Plant,andEquipmentChapter6-12LandscapingStreetsSidewalksSewersCostofLandImprovementsAcquisitionofProperty,Plant,andEquipmentChapter6-13DrivewaysParkinglotsFencingLandscapingCostofLandImprovementsAcquisitionofProperty,Plant,andEquipmentChapter6-14Severalassetsareacquiredforasingle,lump-sumpricethatmaybelowerthanthesumoftheindividualassetprices.Asset4Asset3Asset2Asset1Lump-SumPurchaseChapter6-15Severalassetsareacquiredforasingle,lump-sumpricethatmaybelowerthanthesumoftheindividualassetprices.Asset4Asset3Asset2Asset1Portionsofthelump-sumpriceattributabletoparticularassetsareassignedtothoseassets.Lump-SumPurchaseChapter6-16Severalassetsareacquiredforasingle,lump-sumpricethatmaybelowerthanthesumoftheindividualassetprices.Asset4Asset3Asset2Asset1Allocationoftheremaininglump-sumpriceisbasedonrelativevaluesoftheindividualassets.Portionsofthelump-sumpriceattributabletoparticularassetsareassignedtothoseassets.Lump-SumPurchaseChapter6-17Lump-SumPurchases1.Undertheproportionalmethod,thevalueofeachassetisbasedontheproportionofit’smarketvaluetothetotalmarketvalueofthegroupofassetsbeingpurchased.2.Theincrementalmethodisusedwhenmarketvaluesarenotavailableforalloftheassets.AcquisitionofProperty,Plant,andEquipmentChapter6-18ProportionalMethodAcompanypays$120,000forlandandabuilding.Thelandandbuildingareappraisedat$50,000and$75,000,respectively.AppraisalRelativeFairTotalAllocatedValueValuexCost=CostLand$50,000$50,000/$125,000x$120,000=$48,000Building75,000$75,000/$125,000x$120,000=72,000Total$125,000$120,000AcquisitionofProperty,Plant,andEquipmentChapter6-19ProportionalMethodAcompanypays$120,000forlandandabuilding.Thelandandbuildingareappraisedat$50,000and$75,000,respectively.Land48,000Building72,000Cash120,000AcquisitionofProperty,Plant,andEquipmentChapter6-20Acompanypays$120,000foratruckandausedcustommademachine.Thetruckhasavalueof$70,000butthevalueofthemachineisunknown.Truck70,000Equipment50,000Cash120,000IncrementalMethodIncrementalMethodChapter6-21Whenplantassetsareusedthatrequiresubstantialcostsofdismantling,removal,andsitereclamationattheendoftheasset’susefullife...Thepresentvalueofthesecostsshouldbecapitalized