Journal Entries
Depreciation expense
What is dr?
(cost - residual) / useful life
What is straight-line depreciation?
Long-lived assets used by a company to help produce products and otherwise contribute to the revenue-generating process
What is Capital Assets
These following criteria must be met:
1. Management commits to a plan to sell
2. An active program to locate a buyer has been initiated
3. It is available for immediate sale
4. The sale is probable and is expected to be completed within one year
5. It is being actively marketed for sale at a price that is reasonable
What is PPE held for sale?
This gets added to the book value
What is improvements, betterments or subsequent expenditures?
Accumulated depreciation
What is cr?
(cost - residual) / useful life estimated in units
What is units-of activity method?
These long-lived assets fall into three major balance sheet categories.
What is PPE, intangible assets, and long-lived assets held for sale?
Patents, Copyrights, Trademarks, Franchises & Licenses, Leases & Leasehold improvements, Goodwill, Deferred Charges, Research & Development
What is intangible assets?
This gets subtracted from the book value
What is accumulated depreciation?
Gain on sale
What is credit?
Book value (cost - accumulated amortization) x straight line rate
What is declining method?
Expenditures that enhance the service potential of property, plant and equipment by extending the useful life, lowers operating costs, or improves the quality or quantity of output.
What is subsequent expenditures or betterments?
This cost does not have an effect on book value but is subtracted from the depreciable base
What is residual cost?
What is dr?
1/useful life
What is straight-line rate?
The excess cost of an enterprise above the net of the amount assigned to assets and liabilities
What is Goodwill?
Book value (cost - accumulated amortization) x 2x straight line rate
What is double declining method?
Land , Buildings , Equipment , Tools , Furniture , Fixtures, Vehicles are all included under this category
What is PPE?