CHAPTER 8 operating(a) Assets: Property, Plant, and Equipment, and Intangibles QUESTIONS 1. direct summations include property, plant, and equipment and intangibles. Examples of pluss considered operating pluss argon grammatical constructions, equipment, lower, land improvements, patents, copyrights, and goodwill. Operating assets ar significant to the long-term future of the company because they are the assets used to capture a product or pay heed sold to customers. The operating assets allow a company to garden truck a product efficiently and remain competitive with rough other firms. 2.The attainment cost of an asset includes all the be ordinarily necessary to acquire the asset and prepare it for its mean use. acquisition costs include the purchase price, freight costs, elicitation costs, taxes paying at the time of purchase, and repairs made to prepare the asset for use. 4.It is important to separately account for the cost of land a nd building because the beat allocated to a building represents a depreciable measuring stick, while the add up allocated to land does not. 6.The pedigree in expedientness of an operating asset is touch to physical deterioration factors, such as wear and tear. It is as well as related to obsolescence and technological factors and to the repair and sustainment of the asset.
The depreciation regularity acting chosen should match the decline in usefulness of the asset to the periods benefited by the asset afterwards all factors have been interpreted into account. However, the company is not necessitate to use the same method for all depreciable ass! ets. 8.When the straight-line method is used, the equilibrium value should be deducted from the acquisition cost to determine the depreciable heart to be allocated over the useful life of the asset. When the double-declining-balance method is used, the symmetricalness value is not deducted. However, the asset should not be depreciated to an amount that is lower than the residual value. 9.Companies may use one method of...If you want to get a full essay, order it on our website: BestEssayCheap.com
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