Introduction
This lesson will focus on long-term assets, which fall into several categories:
- plant assets are long-term assets that physically exist and will be used to generate income, but are not inventory. For plant assets, you will
- calculate depreciation using three different methods and
- record their disposal.
- natural resources are long-term assets provided by the planet. Examples include coal, petroleum, timber, gold, and silver.
- intangible assets are long-term assets that do not physically exist. Examples include trademarks, copyrights, and patents.
The majority of the lesson focuses on plant assets.
Lesson Objectives
After completing this lesson, you should be able to do the following things:
- Describe the difference between revenue and capital expenditures.
- Record the purchase of and identify the cost of plant assets.
- Calculate the depreciation expense for plant assets using the following methods:
- straight-line,
- units of production,
- double-declining balance.
- Analyze the disposition of assets to determine whether a gain or loss must be recorded involving their disposal, sale, and exchange.
- Identify and describe
- intangible assets and
- natural resources.
Lesson Readings & Activities
By the end of this lesson, make sure you have completed the readings and activities found in the Lesson 7 Course Schedule.
