Table of Contents
Introduction to Accounting I An Interactive Case Approach
Assignment Due Today
Today’s In-Class Activities
Decisions involved in the acquisition of long-term assets
What assets are considered to be long-term or fixed assets?
At what cost do we record the fixed asset when we acquire it?
What happens if we buy more than one fixed asset at a time for one purchase price - such as land and building together?
Basket Purchase
Basket purchase example
Basket purchase example cont.
What options do I have in financing the purchase price of the fixed asset?
If you don’t have the cash, how would you choose between those other options?
Factors to consider
A word about leases
Is there a way to use the asset without intending to purchase it?
Decisions involved in the usage and financial statement presentation of fixed assets
Where is the usage of fixed assets reflected in the financial statements?
Transaction Worksheet Approach
Why have a contra-asset?
Useful Terminology
Accumulated Depreciation: Transaction Worksheet Treatment
PPT Slide
How do you decide what to use for a useful life and salvage value?
How do you decide how much of the fixed asset was used up this period?
Why record depreciation at all?
Example of F/S presentation
Example of F/S presentation(cont.)
Example of F/S presentation(cont.)
Tax returns
Tax returns cont.
PPT Slide
Depreciation on tax return
Deferred Taxes
Assignment for Next Time
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