ACCT 200 Outline of Last Lecture I Some Definitions II Double Declining Balance Method Example III Disposal of Fixed Assets Outline of Current Lecture I Homework 7 2 II Homework 7 3 III Homework 7 4 IV Homework 7 6 V Homework 7 9 VI Homework 7 11 VII Homework 7 12 VIII Homework 7 14 Current Lecture I Homework 7 2 a Yes all expenditures should be recorded as an increase in the land account b No land is never depreciated because it can t be used up II Homework 7 3 Initial Cost 700 000 Legal fees 1 900 These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Delinquent fees 9 000 Demolition cost 6 000 Salvage 1 175 III Homework 7 4 a Revenue b Revenue c Capital d Capital e Capital f Capital g Capital h Revenue i Capital j Capital revenue expenditure routine expense capital expenditure adds new value to asset IV Homework 7 6 a No this is what we originally paid for the equipment historical cost b No the 750 000 is accumulation of past depreciation V Homework 7 9 a Year 1 240000 0 40 6 000 Year 2 240000 0 40 6 000 b Year 1 240000 0 x 2 40 12 000 Year 2 240000 12000 x 2 40 11 400 VI Homework 7 11 a 2012 42000 6000 x 1 10 x 3 12 900 2013 42000 6000 x 1 10 x 12 12 3600 b 2012 42000 0 x 2 10 x 3 12 2100 2013 42000 2100 x 2 10 x 12 12 7980 VII Homework 7 12 a 2010 795 2009 492 4934 4231 16147 13872 1154 828 9238 8730 13792 10693 In 2010 they bought more spent more and did more to make their assets better This shows that Kraft must be expanding their operations b VIII Normally you would expect book value to decrease BUT since Kraft is growing this is normal Homework 7 14 a 37500 45000 12 27 500 per year b book value 37500 27500 x 3 292 500 c Loss 280000 292500 12 500 Cash 280000 Asset 375000 Loss 12500 Accumulated depreciation 82500 d Gain 300000 292500 7500 Cash 300000 Asset 375000 Gain 7500 Accumulated Depreciation 82500
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