西方财务会计_chapter8.pptVIP

Chapter 8 PLANT ASSETS INTRODUCTION Noncurrent tangible assets. Acquired for use in the operation of the business. The accounts that make up plant assets appear on the balance sheet after current assets and long-term investments. Other titles for plant assets are fixed assets;property and equipment; and property,plant,and equipment. Plant assets should be expected to last for more than one accounting period. Plant assets are usually depreciable property except for land. Examples:land,buildings,office machines…… Accounting for plant assets Acquisition Disposal(discard,sell,exchange) Depreciation Valuation of plant assets at acquisition For one piece: reasonable and necessary expenditure For lump-sum purchase:allocating to the various assets purchased according their fair market value. Plant assets can be acquired with long-term notes payable. (In such case,assets are recorded at the present value of the consideration exchanged) Asset Acquisition:one piece Determining Cost On May 4, Heat Co., an Ohio maker of stoves, buys a new machine from a Texas company. The new machine has a price of $52,000. Sales tax was computed at 8%. Heat Co. pays $500 shipping cost to get the machine to Ohio. After the machine arrives, set-up costs of $1,300 are incurred, along with $4,000 in testing costs. Compute the cost of Heat Co.’s new machine. Determining Cost Lump-Sum (or Basket)Purchases of Assets Basket Purchase The purchase of two or more assets acquired together at a single price. Relative Market Valuation A way of allocating a basket purchase price to the individual assets acquired based on their respective market values.(example:page 166) Acquisition of plant assets with note payable In such situation, in order to be in accordance with the cost principle, the recorded cost of an asset purchased on credit is based on one of the following, whichever is more objective and reliable: (1) the cash equivalent price (market value) and (2) the present value of