Intermediate Accounting 高远公共邮箱: ounting@ 密码: accounting Course Outline 1. Accounting for Long term Assets -Tangible assets: PPE( property, plant and equipment) - Intangible assets: Goodwill 2. Consolidated accounts 合并报表 -Consolidated balance sheet; consolidated e statements -treatment of goodwill Analysis -Liquidity, Profitability, and solvency ratios - including calculation of Earnings per share (EPS) Depreciation ? Three factors of depreciation ? 1. cost (including invoice price, delivery, import duty, installation, renewals) or revalued amount ? 2. useful life: ? 3. residual value ? Depreciation methods: ? line ? balance ? of digits 年数总和法 example 1 Simple plc has purchased a machine. The details are as follows: Cost of machine $800,000 Residual value $104,000 Estimated life 4 years Calculate: the annual depreciation charge using the a)straight -line method, and b)sum of digits method example 1 straight line $,000 Cost 800 ? Depreciation for year 1 174 Net book value 626 ? Depreciation for year 2 174 Net book value 452 ? Depreciation for year 3 174 Net book value 278 ? Depreciation for year 4 174 ? Residual value 104 Cost - estimated residual value = depn . charge per year Estimated economic life (800-104) /4 = 174 example 1 sum of digits Cost 800 ? Depreciation for year 1 278 696 * 4/10 Net book value 522 ? Depreciation for year 2 209 696 * 3/10 Net book value 313 ? Depreciation for year 3 139 696 * 2/10 Net book value 174 ? D
