ACC 221 1st Edition Lecture 22 Outline of Previous Lecture Section 21 Fixed Assets Fixed Assets o Other Names o Characteristics o Dollar value we put into assets o Operating costs and expenses o Grey area Outline of Current Lecture Section 22 Fixed Assets Review Fixed Assets o Dollar value we put into assets o Operating costs and expenses o Grey area Current Lecture Section 21 Fixed Assets Review Fixed Assets o Dollar value we put into the asset accounts Appear on balance sheet Total amount of money paid to be able to put it into service Purchase price 30 000 Sales tax 2 000 Service fees 200 o Total amount to be able to put the capital asset into use 32 200 Transaction Dr truck 32 200 Cr cash o Operating costs and expenses appear on income statement Expenses once capital asset is put into service maintenance ect Requirement for insurance o Not a capital cost reoccurring expense Maintaining the vehicle Oil change maintaining the life expense Tire change maintaining the life expense 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 New engine 5 000 to extend life extra 3 years extending life of asset considered capital asset o Dr truck cr Cash o Grey area Putting logo onto a truck Needed Or just for advertising purposes May be either in some cases this is a requirement prior to operating the vehicle o Company rules ice cream truck If we were not sure where would our conservative guess go Consider operating expense o Worst case scenario decreases assets o Makes a difference in how possible investors observe the business
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