Ch. 8 - Long Lived AssetsWorksheetSee all chapters
All Chapters
Ch. 1 - Introduction to Accounting
Ch. 2 - Transaction Analysis
Ch. 3 - Accrual Accounting Concepts
Ch. 4 - Merchandising Operations
Ch. 5 - Inventory
Ch. 6 - Internal Controls and Reporting Cash
Ch. 7 - Receivables and Investments
Ch. 8 - Long Lived Assets
Ch. 9 - Current Liabilities
Ch. 10 - Time Value of Money
Ch. 11 - Long Term Liabilities
Ch. 12 - Stockholders' Equity
Ch. 13 - Statement of Cash Flows
Ch. 14 - Financial Statement Analysis
Ch. 15 - GAAP vs IFRS
Initial Cost of Long Lived Assets
Basket (Lump-sum) Purchases
Ordinary Repairs vs. Capital Improvements
Depreciation: Straight Line
Depreciation: Declining Balance
Depreciation: Units-of-Activity
Depreciation: Summary of Main Methods
Depreciation for Partial Years
Retirement of Plant Assets (No Proceeds)
Sale of Plant Assets
Change in Estimate: Depreciation
Intangible Assets and Amortization
Natural Resources and Depletion
Asset Impairments
Exchange for Similar Assets

Concept #1: Change in Depreciation Estimate for Useful Life and Salvage Value

Practice: Roller Coaster Tycoons purchased a concession stand for $360,000. Initially, the concession stand was depreciated straight-line over a ten year useful life with no residual value. After six years in use, RCT assessed that the concession stand would be useful for only two more years. What is depreciation expense in year 7?

Practice: Changing Minds Company purchased a building for $480,000 and depreciated on a straight-line basis over 40 years, estimating a residual value of $60,000. The company depreciated the building for twenty years and then estimated that the building would only remain useful for another twelve years. At this time, the company also re-evaluated the residual value at $30,000. What will be depreciation expense in year 21?