MGAB02H3 Study Guide - Comprehensive Final Exam Guide - Depreciation, Amortization, Financial Statement
20 Nov 2018
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To account for the cost of assets, it must include all cots that are required to make the asset operational. These costs will always be expensed as the benefits are hard to measure : Bought a land and building for $ 1,000,000. Allocate the basket purchase based on the fmv of the assets on a stand alone basis. Jason bought a house and all the furniture from his friend for $ 1,200,000. $ 600 for a cleaning lady to clean the house after he moved in. Fv market value at the time of purchase: Buy a building for $ 1,000,000 and issued common shares. Buy a building for $ 1,000,000 and arrange a loan. Buying the building for $ 1,000,000 and th evendor allows credit term of 2/10, net 30. Depreciation : (original cost - residual value)/life ($ 40,000 - $ 10,000)/5. Regular declining balance method - depreciation rate : Double declining balance method - double the rate.
