land as inventory. * They are long-term in nature and usually depreciated. Property‚ plant‚ and equipment yield services over a number of years. Companies allocate the cost of the investment in these assets to future periods through periodic depreciation charges. The exception is land‚ which is depreciated only if a material decrease in value occurs‚ such as a loss in fertility of agricultural land because of poor crop rotation‚ drought‚ or soil erosion. * They possess physical substance
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Historical cost accounting Advantages • Historical cost accounts are straightforward to produce • Historical cost accounts do not record gains until they are realized • Historical cost accounts are still used in most accounting systems Disadvantages • Historical cost accounts give no indication of current values of the assets of a business • Historical cost accounts do not record the opportunity costs of the use of older assets‚ particularly property which may be recorded at a value based
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the tertiary sector would use fixed assets or non-current assets. Fixed assets can vary from buildings and premises to cars or the equipment used. Whatever the case proper management of fixed assets is needed. By this we mean providing proper depreciation‚ spending on maintenance and repair as well as adjusting the accounts clearly and accurately to show the changes in fixed assets. This project looks at the procedures involved in acquiring fixed assets and the disposal of fixed. It also uses accounting
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metres) ( X 49600) ( X 49600) ( X 49600) ( X 49600) 49600 19840 22320 4960 2480 Buildings Insurance Floor area (sq metres) ( X 12800) ( X 12800) ( X 12800) ( X 12800) 12800 5120 5760 1280 640 ( X 26600) ( X 26600) Machinery depreciation Value of machinery 26600 18815 7785 Total Allocated and Apportioned Overheads 424020 199957 168303 37173 18587 First RE-Apportionment Canteen Given % ( X 18587) ( X 18587) ( X 18587) 5576 10223 2788 (18587) 424020 205533
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class. The machinery is expected to have a salvage value of $25‚000 after 4 years of use. The new line would generate incremental sales of 1‚250 units per year for four years at an incremental cost of $100 per unit in the first year‚ excluding depreciation. Each unit can be sold for $200 in the first year. The sales price and cost are expected to increase by 3% per year due to inflation. Further‚ to handle the new line‚ the firm’s net operating working capital would have to increase by an amount
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The annual depreciation expense on the old truck was $500. The new truck‚ which will cost $29‚000‚ will reduce operating costs $9‚000 per year over it ’s 6 year economic life. The new truck has a 5-year MACRS life and an estimated salvage value at the end of 6 years of $2‚000. If Maplewood has a 40 percent marginal tax rate and a cost of capital of 12 percent‚ what is the NPV of the new truck? Use the Depreciation schedule listed below: (5-Year depreciation Schedule:
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Includes bargain purchase option. Note: There is a rounding error of $1. PREPARE A SCHEDULE OF LEASE PAYMENTS FOR PURPLE LTD. Note: There is a rounding error of $1. JOURNAL ENTRIES For Lemon Ltd: (Depreciation expense = [$29‚568 - $3‚600] / 5 years = $5‚194) For Purple Ltd: (Net Method) For Purple Ltd: (Gross Method) FINANCIAL STATEMENTS OF BOTH COMPANIES FOR YEAR ENDING 30 JUNE 2009 Lemon Ltd Extract of Financial Statement Note
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CHAPTER 5: ACCOUNTING FOR GENERAL CAPITAL ASSETS AND CAPITAL PROJECTS OUTLINE Number Topic Type/Task Status (re: 13/e) Questions: 5-1 Distinguishing general capital assets from fund capital assets Describe New 5-2 Capital asset disclosures Explain New 5-3 Modified approach for infrastructure Describe New 5-4 Capital lease accounting Describe 5-8 revised 5-5 Asset impairment Explain New 5-6 Use of capital projects funds Explain 5-4 revised 5-7 Encumbrances Explain Same 5-8 Construction
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Lecture 6 Receivables 1. Types of receivables (1)Accounts receivable: the amounts owed to the firm by customers on account from the sale of goods or services (2)Notes receivable: the amounts owing to the firm outside normal trade for which formal instruments of credit are issued evidencing the debt‚ and on which interest is generally payable (3) Other receivables include non-trade receivables such as interest receivable‚ loans‚ advances and GST receivable. 2. Accounting for A/R Accounts receivables
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(a) General Ron Meiri was autocratic (lines 8–9). Identify four key features of an autocratic leadership style. [4 marks] (b) “The organizational structure of the UWP Mission was tall” (lines 9–10). Explain one advantage and one disadvantage of this type of structure. [4 marks] (c) Analyse the appropriateness of a bank loan as a source of finance for Kos Palouk’s new lorry (lines 129–130). [7 marks] 2. (a) Loyka’s economy is mainly in the primary sector
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