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  • Ppe Problems Review

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    frenzuaavellanoza1222
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    The document provides accounting guidance on various topics such as: 1) Prepaid supplies are considered part of prepaid expenses. 2) Legal fees should be included in the cost of land and demolition costs of an old building should be included in the cost of a new building. 3) The sale of scrap materials from an old building should be deducted from the cost of the new building.

    Original Description:

    intermediate Accounting

    Original Title

    PPE-PROBLEMS-REVIEW

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    The document provides accounting guidance on various topics such as: 1) Prepaid supplies are considered part of prepaid expenses. 2) Legal fees should be included in the cost of land and demolition costs of an old building should be included in the cost of a new building. 3) The sale of scrap materials from an old building should be deducted from the cost of the new building.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    8 views6 pages

    Ppe Problems Review

    Uploaded by

    frenzuaavellanoza1222
    The document provides accounting guidance on various topics such as: 1) Prepaid supplies are considered part of prepaid expenses. 2) Legal fees should be included in the cost of land and demolition costs of an old building should be included in the cost of a new building. 3) The sale of scrap materials from an old building should be deducted from the cost of the new building.

    Copyright:

    © All Rights Reserved
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    of 6

    DEDUCT DISCOUNTS WHETHER

    TAKEN OR NOT

    SUPPLIES ARE PART OF PREPAID


    EXPENSES

    LAND:
    INCLUDE LEGAL FEES

    BUILDING
    - DEDUCT SALE OF SCRAP MATS
    FROM OLD BUILDING

    - INCLUDE DEMOLITION COST OF OLD


    BUILDING TO CONSTRUCT THE NEW
    BLDG

    IF ALLOCATED ON BASIS OF DL COST:

    - CREATE RATIO BY ADDING THE DL


    COST INCURRED BY BOTH USAGE
    - ALLOCATE OH BASED ON THAT
    RATIO

    NORMALLY:

    - APPLY THE GIVEN OH % ON


    NORMAL COSTING
    NON INTEREST BEARING NOTE:

    MULTIPLY THE PRICE BY THE PRESENT


    VALUE FACTOR

    ACQUISITION BY EXCHANGE

    - WITH COMMERCIAL SUBSTANCE

    CONSTRUCTION OF NEW
    BUILDING (BORROWING
    COST)
    GENERAL BORROWING
    COST

    FIND THE AMOUNT TO BE


    CAPITALIZED TO COST

    GENERAL BORROWING
    COST

    FIND THE AMOUNT TO BE


    CAPITALIZED TO COST

    GENERAL BORROWING
    COST

    FIND THE AMOUNT TO BE


    CAPITALIZED TO COST
    DEPRECIATION K

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