1. Chapter 7 Summary

2. Tangible Land Land Improvements Buildings Equipment Vehicles Natural Resources Actual Ownership Rights to Mine Intangibles Patents Copy Rights Trade Marks

3.  All Costs Associated with Purchase of Asset ◦ Costs needed to use Asset for Intended Purpose

4. Lump-Sum (Basket) Purchase Determine Market (Appraised) Value of each Asset separately Determine relative % of each assets Market Value to Total Market value Multiply market value % (weight) by Lump-Sum Cost

5.  Assets: ◦ Economic Resources that provide a future Benefit ◦ Benefit provided by Long-Term Assets  Revenue  Matching Principle ◦ Record any costs associated with Revenue Earned in the Period ◦ Consumption of Assets are a Cost, so we must Expense

6. Depreciation Tangible Asset Depletion Natural Resource Amortization Intangible

7. (Cost – Residual Value) / Useful Life Straight Line (Cost – Residual Value) / Total Units Cost per Unit x Units Produced Units of Production 2 x SL Rate = 2 x (1/Useful Life) Book Value x 2xSL rate Double Declining Balance

8.  Deprecation Expense xxxx  Accumulated Depreciation xxxxxx  Accumulated Depreciation is a ◦ Contra Asset  Asset – Accumulated Depreciation = ◦ Book Value of the Asset