Plant Assets, Natural Resources, and Intangible Assets参考.pptx

;;Plant assets are resources that have physical substance (a definite size and shape), are used in the operations of a business, are not intended for sale to customers, are expected to be of use to the company for a number of years.;Plant assets are critical to a company’s success;Historical Cost Principle requires that companies record plant assets at cost. Cost consists of all expenditures necessary to acquire an asset and make it ready for its intended use. ;All necessary costs incurred in making the land ready for its intended use increase (debit) the Land account.;Illustration: Hayes Company acquires real estate at a cash cost of $100,000. The property contains an old warehouse that is razed at a net cost of $6,000 ($7,500 in costs less $1,500 proceeds from salvaged materials). Additional expenditures are the attorney’s fee, $1,000, and the real estate broker’s commission, $8,000. Required: Determine the amount to be reported as the cost of the land.;Land;Structural additions made to land. Cost includes all expenditures necessary to make the improvements ready for their intended use.;Includes all costs related directly to purchase or construction.;Include all costs incurred in acquiring the equipment and preparing it for use. Costs typically include:;Illustration: Lenard Company purchases a delivery truck at a cash price of $22,000. Related expenditures are sales taxes $1,320, painting and lettering $500, motor vehicle license $80, and a three-year accident insurance policy $1,600. Compute the cost of the delivery truck.;Illustration: Lenard Company purchases a delivery truck at a cash price of $22,000. Related expenditures are sales taxes $1,320, painting and lettering $500, motor vehicle license $80, and a three-year accident insurance policy $1,600. Prepare the journal entry to record these costs.;Ordinary Repairs are expenditures to maintain the operating efficiency and productive life of the unit. Debit to Maintenance and Repair Expense. R