LESSON 8 1 Buying Plant Assets Completing a

LESSON 8 -1 Buying Plant Assets Completing a plant asset record. Buying a plant asset for cash or on account. Calculating and paying property tax. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

2 Chapter 8 Objectives Accounting for Uncollectible Accounts After studying Chapter 8, you will be able to: n Define accounting terms related to plant assets and depreciation. n Identify accounting concepts and practices related to accounting for plant assets and depreciation. n Journalize entries for buying plant assets. n Calculate and record property tax expense. n Calculate and record depreciation expense for a plant asset using straightline depreciation. n Journalize entries disposing of plant assets. n Calculate depreciation expense using other methods. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 8 -1

3 Lesson 8 -1 n plant asset record: an accounting form on which a business records information about each plant asset n real property: land anything attached to it n personal property: all property not classified as real property n assessed value: the value of an asset determined by tax authorities for the purpose of calculating taxes CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 8 -1

4 PLANT ASSET RECORD page 225 1 2 3 1. Complete when asset is purchased. 2. Complete when asset is disposed of. 3. Complete each year to record annual depreciation expense. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 8 -1

5 BUYING A PLANT ASSET FOR CASH page 226 January 2. Paid cash for

6 BUYING A PLANT ASSET ON ACCOUNT page 226 January 2. Bought an office computer on account from Discount Computers, $3, 300. Memorandum No. 70. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 8 -1

7 CALCULATING AND PAYING PROPERTY TAX page 227 Feb 1. Paid cash for property tax, $3, 250. 00. Check No. 122. Assessed Value ´ Tax Rate $65, 000. 00 ´ 5% Annual = Property Tax = $3, 250. 00 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 8 -1

8 DEFINE TERMS REVIEW In Quizlet page 228 Create: Chapter 8 Adv. Acc (then SAVE) n n plant asset record real property personal property assessed value CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 8 -1

9 Exit Ticket for today: Audit Your Understanding 8 -1 In a Word Document, Save. AS: Chapter 8 -1 AYUYour. Name And drop in my Inbox today! 1. What are three sections of a plant asset record? 2. Why are asset purchases not recorded in a purchases journal? 3. What accounts are affected, and how, by an entry to pay property tax? CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 8 -1

10 Complete the following assignments for Chapter 8 -1 today n Define Terms Review on page 228. n Answer Audit Your Understanding questions on page 228. n Complete Work Together 8 -1 on Aplia – page 228. n Complete On Your Own 8 -1 on Aplia – page 228. n Complete Application Problem 8 -1 on Aplia – page 251. n Complete Application Problem 8 -2 on Aplia – page 251. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 8 -1