Random
When the equipment is sold at a price more than its original value after depreciation
Gain
negative 10 trillion points >:)
jk free 100 pts :)
Annual Depreciation
Dr. Depreciation Expense
Cr. Accumulated Depreciation
The most commonly used depreciation method
Straight-Line Depreciation method
long-lived assets that businesses expect to create profit over time
plant assets
ogives owner exclusive right to publish and sell a musical, literary, or artistic work during the life of the creator plus 70 years.
copyright
Total Asset Turnover Formula
Net Sales / Average Total Assets
Ordinary repairs entry
Dr. Repairs expense
Cr. Cash
depreciation is calculated using the assets beginning book value
Double Decline method
the process of allocating the cost of a plant asset to expense in the accounting periods benefiting from its use.
Depreciation
how an intangible asset is expensed throughout its useful life
amortization
Straight-Line Depreciation Formula:
(Cost-Salvage Value) / Useful Life
Discarding fully depreciated equipment
Cr. Equipment
charges the same amount of expense to each period of the asset’s useful life
Straight-Line Depreciation
Non-physical Assets with a limited life
Intangible Assets
Extracted from the natural environment and reported at cost less accumulated depletion.
Natural Resources
Units of Production Formula: (gimme both parts)
1. (Cost-Salvage Value) / total Units of production
2. Depreciation per unit * Number of units produced in the period
Dr. Depletion Expense
Cr. Accumulated Depletion
charges a varying amount for each period depending on an asset’s usage.
Units of Production
The physical asset that is not depreciable
Land
Name the three periods in an asset's book value over its useful life
1. Acquisition
2. Use
3. Disposal
Double Decline Method Formula: (gimme all of the steps)
1. Years/Useful Life = Straight-Line Rate
2. Straight-Line Rate * 2 = Double Decline Rate
3. Double-Decline Rate * beginning period book value
The sale of an asset at a loss
Dr. Cash
Dr. Loss on Disposal of Equipment
Dr. Accumulated Depreciation
Cr. Equipment
uses a depreciation rate that is a multiple of the straight-line rate
Double-Decline method
–Provide benefits for longer than the current period.
–Recorded as an addition to the asset account.
–Reported on the balance sheet.
Capital Expenditures