西方财务会计-chapter8.ppt

单击此处编辑母版标题样式,单击此处编辑母版文本样式,第二级,第三级,第四级,第五级,2020/8/6 Thursday,#,2026/11/5,西方财务会计_chapter8,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,2,Accounting for plant assets,Acquisition,Disposal(discard,sell,exchange),Depreciation,3,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),4,Asset Acquisition:one piece,Asset price,.for getting the asset to the desired location,.,.for getting the asset ready for use.,Cost,=,Reasonable and necessary costs.,+,5,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.,6,Determining Cost,7,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),8,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 the future cash payments required by the debt agreement discounted at the prevailing(market)interest rate for that type of debt.,9,Acquisition of plant assets with note payable,Example:on May 1,2003,Fesler,Inc.purchased equipment,paying$3000 down,and issuing a note payable.The note required,four annual payments,of,$2500,with the first payment due on May 1,2004.The note is noninterest-bearing.The prevailing market rate of interest on notes of this kind is,12%,.Prepare the required journal entries on May 1,2003(year-end).The useful life of the equipment was estimated,10 years,and no salvage value.,10,Acquisition of plant assets with note payable,Annuity payment$2500,PVA$1,n=4,I=12%,3.03735,PV of note(rounded)$7593,Down payment,3000,Cost of equipment,$10593,5/1 Equipment 10593,Discount on Note payable 2407,Cash 3000,Notes payable 10000,12/31 interest expense 607,Discount on Note payable 607,($7593*12%*8/12=$607),Depreciation exp.706,Accu.Depr.706,($10593*1/10*8/12=706),11,Discard,Sell for monetary consideration,Exchange for noncash assets,Disposal of Plant Assets,$,Accounting for Disposalof Plant Assets,:,discard,Fixtures cost:$4,000,Accumulated depreciation:$3,000,Book value$1,000,Accumulated Depreciation3,000,Loss on Disposal1,000,Store Fixtures4,000,To dispose of store fixtures,13,Selling,a Plant Asset,For book value:no gain or loss,(example 1),Above book value:a gain is recorded,(example 2),Below book value:a loss is recorded,(example 3),14,For students,On September 30,2005,Evans Map Company sells a machine that originally cost$100,000 for$60,000 cash.The machine was placed in service on January 1,2000.It has been depreciated using the straight-line method with an estimated salvage value of$20,000 and an estimated useful life of 10 years.,Lets answer the following questions.,15,The amount of depreciation recorded on September 30,2005,to bring depreciation up to date is:,a.$8,000.,b.$6,000.,c.$4,000.,d.$2,000.,Annual Depreciation:,($100,000-$20,000)10 Yrs=$8,000,Depreciation to Sept.30:,9/12$8,000=$6,000,16,After updating the depreciation,the machines book value on September 30,2005,is:,a.$54,000.,b.$46,000.,c.$40,000.,d.$60,000.,17,The machines sale resulted in:,a.a gain of$6,000.,b.a gain of$4,000.,c.a loss of$6,000.,d.a loss of$4,000.,18,Prepare the journal entry to record the sale.,19,Nonmonetary Transactions(Exchanges),The types of nonmonetary exchanges we will be looking at are as follows:,Dissimilar exchanges,Similar exchanges,Loss involved,no boot(cash),Loss involved,boot paid by you,Loss involved,boot received by you,Gain involved,no boot,Gain involved,boot paid by you,Gain involved boot received by you,20,Exchanges of Plant Assets,Types of Accounting Rationale,Exchange Guidance,Dissimilar,Recognize gain,Earnings process,assets and losses is complete,Similar Recognize loss;Earnings process,assets(,cash,is partially,received,partial gain,complete,Similar Recognize loss;Earnings process,assets(,No,Defer gain,is not complete,cash received,),21,Exchanges,of,similar,Assets,Example:Land for land,truck for truck,etc.In this case but on-going.,Losses should always be recorded,according to Conservatism principle,but gains deferred in some cases,because,the earnings process is not really complete,22,Exchanges,of,similar,Assets,Businesses often trade in their old plant assets for similar assets that are newer and more efficient.,The list price of the new asset less the trade-in allowed for the old asset equals the amount to be paid,.(example:page169),In many cases,the list price(fair market value)and the cash paid(or received)are ready,so the trade-in allowed is not appear.,23,Similar Assets:loss;No boot,Truck#1(You)Truck#2,Cost$35,000 FMV$20,000,A/D,10,000,BV 25,000,FMV 15,000,Loss =$10,000,To,record:,A/D10,000,Loss10,000,Truck#2,Truck#1 35,000,15,000,24,Similar Assets:loss;cash paid,Businesses often trade in their old plant assets for similar assets that are newer and more efficient.,The list price of the new asset less the trade-in allowed for the old asset equals the amount to be paid,.(example:page169),In many cases,the list price(fair market value)and the cash paid(or received)are ready,so the trade-in allowed is not appear.,25,Similar Assets:loss;cash paid,Losses are recognized,The new asset is recorded at the,fair market value,of the asset exchanged(,=Fair value of used asset+Cash paid,).,Example5:page169,26,Similar Assets:loss;cash paid,Truck#1(You)Truck#2,Cost$12,000 FMV$13,000,A/D,4,000,BV 8,000,FMV(#1)6,000,Loss=$2,000,FMV(#1)6,000,+cash paid,7,000,Total,13,000,27,To record:,Truck#2,A/D,(Accu.Dep),4,000,Loss 2,000,Truck#112,000,Cash 7,000,13,000,28,Similar:Loss;Cash Received,Land#1(You)Land#2,Cost$50,000 FMV$28,000,FMV$38,000 cash paid by you:10,000,$50,000-38,000=,$12,000 loss,29,To record:,Cash 10,000,Loss 12,000,Land#2,Land#150,000,28,000,30,Similar Assets:Gain;No boot,Land#1(You)Land#2,BV$80,000 FMV$90,000,FMV 90,000,Gain=$10,000 not recognized,To record:,Land#2,Land#180,000,80,000,31,Similar Assets,Gain,Cash Paid,(Deferred gain),Gains are not recognized.(because the earning process is not complete.),The,new assets cost=the book value of the old asset+the amount paid,(=the fair value of the new asset-deferred gain),Example 4(page 169),32,Similar Assets,Gain,Cash Paid,(Deferred gain),Land#1(You)Land#2,BV$80,000 FMV$120,000,FMV 90,000,Gain=$10,000 deferred,cash paid$15,000,To record:,Land#2 (BV+cash),Land#180,000,Cash15,000,95,000,33,Similar Assets,(Deferred gain),Davis company exchanges Ford cars for GM cars from Nertz company.,Fair value of Ford cars:$160,000.,Book value of Ford cars:$135,000(Cost,$150,000;Accu.Depr,$15,000),Cash paid to Nertz:$10,000,Fair value of GM cars:($160,000+$10,000)=$170,000,Record the purchase in Davis books,.,34,Similar Assets,(Deferred gain),Cash,$10,000,plus,Ford cars,FMV=$160,000,Davis defers gain=FMV less book value=$25,000,Davis,Nertz,GM cars,FMV=$170,000,35,Similar Assets,(Deferred gain),GM cars,Accu.Dep(Ford)15,000,Ford cars(old)150,000,Cash 10,000,Fair value of GM cars$170,000,Gain deferred,($25,000),GM cars(basis),$145,000,(or:BV+cash paid=135000+10000=145000),145,000,36,Similar Assets,Gain,Cash Received,(Partial gain),Davis company exchanges Ford cars for GM cars from Nertz company.,Fair value of Ford cars:$160,000.,Cash paid to Nertz:$10,000,Fair value of GM cars:($160,000+$10,000)$170,000,Book value of GM cars:$,136,000,(Cost,$200,000;Accu.Depr,$64,000),Record the exchange in Nertzs books,.,37,Cash,$10,000,plus,Ford cars,FMV=$160,000,Nertz:,Total Gain:FMV less book value=$34,000,Davis,Nertz,GM cars,FMV=$170,000,38,Since Nertz receives cash(boot)as part of the exchange,Nertz recognizes partial gain as follows:,FMV less Book value =Realized gain$170,000-$136,000=$34,000,Recognized gain:(next slide),39,Nertz recognizes partial gain as follows:,(,boot/total consideration)*Realized gain,($10,000/$170,000)*$34,000,=$2,000.,Total gain less gain recognized=,deferred gain,$34,000 less$2,000=$32,000,40,Ford cars,Accu.Dep(GM)64,000,Cash 10,000,GM cars(old)200,000,Gain on disposal 2,000,Fair value of Ford cars$160,000,Gain deferred,($32,000),Ford cars(basis),$128,000,128,000,41,Exercise:page180,T12(case A),42,EXERCISE 12(CASE A),(1)entry in company M:,Asset N 2500,Accu.Dpre.5500,Asset M 8000,(1)entry in company N:,Asset M 2800,Accu.Dpre.4800,Loss 600,Asset N 8200,(2)entry in company M:,Asset N 3300,Accu.Dpre.5500,Asset M 8000,Cash 800,(2)entry in company N:,Asset M 2644,Accu.Dpre.4800,Cash 800,Asset N 8200,Gain 44,43,Dissimilar Assets,For example:Sold a truck with a cost of$34,000,A/D of$23,000 for cash of$6,000 and a piece of land with a FMV of$9,000.,To record:,A/D 23,000,Cash 6,000,Land,Truck34,000,Gain 4,000,9,000,44,Dissimilar Assets,Your truck for Land,Cost$80,000 FMV$60,000,A/D,(10,000),BV 70,000,To record:,A/D10,000,Loss10,000,Land,Truck 80,000,60,000,45,Dissimilar Assets,Amber company exchanges a number of trucks for land from Becktel company.,Fair value of trucks:$49,000.,Book value of trucks:$42,000(Cost,$64,000;Accu.Depr,$22,000),Cash paid to Becktel:$17,000,Record the exchange in Ambers books,.,46,Amber,Becktel,Land,FMV=$66,000,Cash,$17,000,plus,Trucks,FMV=$49,000,Amber recognizes gain=FMV less Book value=$7,000,47,Land,Accu.Dep(Trucks)$22,000,Trucks$64,000,Cash$17,000,Gain on disposal$7,000,66,000,48,Dissimilar Assets:gains,See page170-171,Exercise:page180,T12(case B),49,EXERCISE 12(CASE B),(1)entry in company A book:,Asset B 4500,Accu.Depr.(A)7000,Asset A 10000,Gain 1500,(1)entry in company B book:,Asset A 4500,Accu.Depr.(B)10500,Asset B 14000,(2)entry in company A book:,Asset B 5700,Accu.Depr.(A)7000,Asset A 10000,Cash 1200,Gain 1500,(2)entry in company B book:,Asset A 4500,Accu.Depr.(B)10500,Cash 1200,Asset B 14000,Gain 2200,50,Does the expenditure increase capacity,or efficiency or extend useful life?,Capital Expenditures:,Record an asset,Expenses:,Record an expense,Capital Expenditures versusRevenue Expenditures,Yes,No,51,Capital Expenditures versusRevenue Expenditures,Capital Expenditures,-,Major additions,-Betterments,-Extraordinary repairs,Revenue expenditures,Ordinary repairs,52,Major additions,Major additions to assets include such things as adding a new wing to a factory building or a new floor to an office building.,Such expenditures should be debited to the appropriate asset accounts.,53,Betterments,Betterments are capital expenditures that improve the quality or utility of the asset.,For example,replacing marrow doors with wider,automatic doors to allow access by the handicapped.,The cost and accumulated depreciation of the old doors,if available,should be removed from the accounts and the cost of the new doors should be added to the asset account.,54,Extraordinary repairs,Extraordinary repairs are capital expenditures that,extend the useful life of the asset or increase its estimated salvage value,.,Journal entry of Extraordinary repairs is:,accumulated depreciation-equipment *,cash *,Example:page 172,55,Depreciation,The allocation of the cost of a plant asset to expense in the periods in which services are received from the asset.,Adjusting entry for depreciation:,Dr.Depreciation expense,Cr.accumulated depreciation,56,Depreciation,IncomeStatement,DepreciationExpense,Depreciation forthe current year,BalanceSheet,AccumulatedDepreciation,Total depreciation todate of balance sheet,57,Factors In Computing Depreciation,1.Cost,2.Useful life,3.Salvage value,58,Annual depreciation expense=,Cost-estimated salvage value,Estimated useful life,Straight-Line Method,Step 1,Depreciation expense per unit of output=,Cost-estimated salvage value,Estimated total production,Step 2,Depreciation expense for current year=,Depreciation per Actual output,unit of output for current year,x,Units-of-Production Method,Larger amounts charged early in the assets life,Lesser amounts as asset ages,Including,Double-Declining-Balance Method and Sum-of-the-Years-Digits Method,Accelerated Methods,61,Double-Declining-Balance Method,The double-declining balance depreciation rate is 200%of the straight-line depreciation rate of 1/Useful Life.,Sum-of-the-Years-Digits Method,Annual DepreciationExpense,=,(Cost Estimated Savage Value),Remaining Life in Years,Sum-of-the-Years Digits,63,Revision of Depreciation Rates,Determination of depreciation involves initial estimates(life,salvage value.),When these estimates are revised,we re-compute depreciation.,These revised depreciation expenses apply prospectively to the remaining life of asset,These changes do not affect prior periods.,64,