About PPE/Disposals
Asset that is not depreciable.
What is land?
Depreciation method that calculates depreciation expense as (cost-salvage value)/useful life.
Straight-line method
Two accounts used in a depreciation journal entry
What are depreciation expense and accumulated depreciation?
Assets that are not Plant, Property, and Equipment but add value to our company by giving us exclusive claims and titles to things.
The two step depreciation method (Will give you 50 additional points if you can give me the equations)
What is Units of Production (Output) Method?
Step 1: (Cost-Salvage Value)/Total Units of Production
Step 2: dep exp= dep per unit x number of units produced in period
_______ is to intangibles what depreciation is to plant assets. (75 bonus points if you can explain the term briefly)
What is amortization?
land improvements, buildings, and equipment should be considered when calculating this expense
What does deprecation apply to?
The balance in Accumulated Depreciation represents the total amount of the asset’s cost that the company has charged to expense to date; it is not a cash fund.
What type of account is accumulated depreciation and what is its normal balance?
contra-asset account with a normal credit balance
An Expense when incurred, not an asset, but important in acquiring intangible assets.
What are research and development costs?
Sale, Exchange, Retirement
What are the methods of plant asset disposal?
Managers might choose this depreciation approach if they think that an asset’s utility will decline quickly.
What is Double-declining-balance method?
Net Income/ Average Total Assets
What is return on assets?
If the proceeds from the sale exceed the book value of the plant asset, a ________occurs
(100 bonus points for coming to board and showing how to calculate it- open to anyone after answer is shown)
What is a gain on disposal?
Book Value at Beginning of Year x Declining Balance Rate=______
Additions to plant assets
What are capital expenditures?