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
Sections
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
Here we focus on the purchase of Fixed Assets that we will use for multiple years.

Concept #1: Introduction to Plant Assets (Fixed Assets, PPE)

Concept #2: Initial Cost of Land

Concept #3: Initial Cost of Land (and Leasehold) Improvements

Concept #4: Initial Cost of Buildings

Practice: On July 1, STLC purchased a building from EZ Construction by putting $60,000 as a down payment and signing a $320,000 note payable due in fifteen years. The note payable had an interest rate of 6% due semi-annually. Other details related to the purchase include: $4,200 in delinquent real estate taxes payable by STLC; $6,000 in brokerage commissions paid by EZ Construction; $1,100 in attorney fees paid by STLC; $11,000 for a company sign at the entrance to the property; and $2,000 for lighting around the grounds of the building. The building is expected to last forty years. What will be the journal entry to record the purchase of the building on July 1?

Concept #5: Initial Cost of Equipment and Machinery

Practice: STLC purchased a new edible underwear production machine at a cost of $14,000. STLC also paid $700 in sales taxes, $1,200 for delivery of the machine, and $1,600 in installation costs. Upon arrival, a special platform needed to be built for the machine to work properly. The special platform cost $4,000. STLC also paid an engineer $1,000 to test the equipment. After successfully installing the machine, STLC insured the machine at a cost of $500. They also spent $150 to lube the gears of the machine. What is the initial depreciable cost of the machine?