1. Chapter 10-1 Chapter 10 Plant Assets, Natural Resources, and Intangible Assets Accounting Principles, Ninth Edition

2. Chapter 10-2 Revising Periodic Depreciation Accounted for in the period of change and future periods (Change in Estimate). Not handled retrospectively. Not considered error. DepreciationDepreciation SO 4 Describe the procedure for revising periodic depreciation.

3. Chapter 10-3 Illustration: Assume that Barb’s Florists decides on January 1, 2013, to extend the useful life of the truck one year because of its excellent condition. The company has used the straight-line method to depreciate the asset to date, and book value is $5,800 ($13,000 - $7,200).Questions: 1.What is the journal entry to correct the prior years’ depreciation? 2.Calculate the depreciation expense for 2013. No Entry Required DepreciationDepreciation SO 4 Describe the procedure for revising periodic depreciation.

4. Chapter 10-4 DepreciationDepreciation Depreciation expense 1,600 Accumulated depreciation 1,600 Journal entry for 2013 SO 4 Describe the procedure for revising periodic depreciation. Book value, 1/1/13 $5,800 Salvage value Depreciable cost Useful life (revised) / Annual depreciation First, establish Book Value at the date of change in estimate. - 1,000 4,800 3 years $ 1,600 Illustration 10-17

5. Chapter 10-5 Ordinary Repairs - expenditures to maintain the operating efficiency and productive life of the unit. Debit - Repair (or Maintenance) Expense. Referred to as revenue expenditures. Expenditures During Useful Life SO 5 Distinguish between revenue and capital expenditures, and explain the entries for each. Additions and Improvements - costs incurred to increase the operating efficiency, productive capacity, or useful life of a plant asset. Debit - the plant asset affected. Referred to as capital expenditures.

6. Chapter 10-6 Companies dispose of plant assets in three ways — Retirement, Sale, or Exchange (appendix). Plant Asset Disposals SO 6 Explain how to account for the disposal of a plant asset. Illustration 10-18 Record depreciation up to the date of disposal. Eliminate asset by (1) debiting Accumulated Depreciation, and (2) crediting the asset account.

7. Chapter 10-7 Illustration: Illustration: Assume that Hobart Enterprises retires its computer printers, which cost $32,000. The accumulated depreciation on these printers is $32,000. The journal entry to record this retirement is? Plant Asset Disposals - Retirement SO 6 Explain how to account for the disposal of a plant asset. Accumulated depreciation32,000 Printing equipment32,000

8. Chapter 10-8 Illustration: Illustration: Assume that Sunset Company discards delivery equipment that cost $18,000 and has accumulated depreciation of $14,000. The journal entry is? Plant Asset Disposals - Retirement SO 6 Explain how to account for the disposal of a plant asset. Accumulated depreciation14,000 Loss on disposal4,000 Companies report a loss on disposal in the “Other expenses and losses” section of the income statement. Delivery equipment18,000