MGT 210 Lecture Notes - Lecture 9: Nike, Inc., Asset, Real Estate Broker
Document Summary
Property (land), plant (building, office), equipment (machine, tools, vehicles) Record at cost capital expenditures (revenue expenditures are costs to keep the asset operating- license and insurance for the following year) Cost to acquire: costs to acquire it, cost to get it ready to use. Attorney fee, real estate commission, purchase price, accrued taxes. Clearing it: removing a building salvageable material. Cash purchase price, sales tax, freight charges, insurance during transit. Allocate cost of tangible operating asset to the period it is being used. Book value = asset accumulated depreciation (how much we haven"t depreciated) Salvage value- estimate of value of the end of useful life. Life- amount of time to be used (estimate) Declining balance = db rate (2 / life) x beginning book value = (asset acc dep) (2 / life) Straight line = straight line rate (1 / life) x depreciable cost = cost salvage value / life.
