Chapter 9 Flashcards
(5 cards)
1
Q
purchase costs
A
purchase price, closing costs,and real estate brokers commission
remodeling and replacing or repairing the roof, floors, electrical wiring and plumbing
2
Q
construction costs
A
contract price plus payments for architects fees, building permits and excavation costs
3
Q
Depreciation
A
process of allocating to expense the cost of a plant asset over its useful life in a rational and systematic manner
- process of cost allocation, not asset valuation
- applies to land improvements, buildings and equipment, not land
- depreciable, because the revenue-producing ability of asset will decline over the asset useful life
4
Q
salvage value
A
estimate of the asset’s value at the end of its useful life
5
Q
record depreciation up to the date of disposal
A
eliminate asset by
- debiting accumulated depreciation
- crediting the asset account
