文档介绍：8 Property, Plant And Equipment
Accounting School · Zhongnan University of Economics & Law
ntermediate Accounting
I
中级会计学
Intermediate Accounting 8 Property, Plant And Equipment
I. Classification as property, plant and equipment
To be included in the property, plant, and equipment category, an asset must have three characteristics:
The asset must be held for use and not for investment.
The asset must have an expected life of more than one year.
The asset must be tangible
in nature.
Intermediate Accounting 8 Property, Plant And Equipment
2. Acquisition of Property, Plant and Equipment
Determination of Cost
pany purchases a machine with a contract price of $100,000 on terms of 2/10, n/30. pany does not take the cash discount and incurs transportation costs of $2,500, as well as installation and testing costs of $3,000. Sales taxes total $5,000 on the purchase. During installation, uninsured damages of $500 are incurred.
What is the cost of the machine?
Intermediate Accounting 8 Property, Plant And Equipment
Valuation at Acquisition
Contract price
Costs of closing the transaction, obtaining the title, options, legal fees, title search, insurance, past due taxes
Cost of Land
Cost of surveys
Clearing and grading property to get it ready for its intended use
Razing old buildings (net of salvage)
Intermediate Accounting 8 Property, Plant And Equipment
Landscaping
Streets
Sidewalks
Sewers
Cost of Land Improvements
Valuation at Acquisition
Contract price
Remodeling and reconditioning
Excavating for the specific building
Architectural and building permit costs
Capitalized interest
Certain unanticipated costs
Cost of Buildings
Intermediate Accounting 8 Property, Plant And Equipment
Valuation at Acquisition
Purchase price
Taxes, freight, and insurance during shipping and installation
Special foundations or reinforcing of floors
Installation and testing
Cost of Equipment
Intermediate Accounting 8 Property, Plant And Equipment
Valuation at Acquisi