Management and Organizational Studies 2285 Lecture Notes - Lecture 3: Deferral

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2285
• Professor: Trevor Hunter

Document Summary

= ,667 warehouse: equipment (,450 + ,000 + ,500) Asset cost = (present value of the annuity + down payment) + installation + rearrangement. = (,000 x 1. 69005) + ,000 + ,000 + ,500. * the original cost of the old motor and the related accumulated depreciation should be removed from the accounts as the asset has been retired and is no longer in use. As these amounts are not known, this entry has been omitted. Calculation of purchase cost of land and building: Current year taxes until date of purchase (,000 x 9/12) #5: the decision to capitalize or expense the amount depends on the interpretation of the nature of the repair of the plumbing system. If it is considered to increase the future service potential of the building it would be treated as a major overhaul. If it is considered to maintain the existing level of service of the building the amount would be expensed.