Question

1. Whats included in the cost of an asset
2. Land improvements

A: don’t recognize depreciation of land but do on land improvements

3. Select the definition of depreciation
4. Definition of book value
5. How do we handle salvage value in calculation depreciation
6. Calculate straight line depreciation (steps)
7. Difference between extending the life of an asset vs maintaining the asset how is it show differently on an accounting standpoint
8. How to calculate a gain on a sale of an longterm asset (steps)
9. How to calculate loss or gain on capital or long term saset
10. Where do we report the loss or gain an asset on the financial statements (if sold an asset and received a gain or loss where will that be reported on a financial statement)

Answer as many questions as you can please

Answer 1

Land improvements are enhancements to a plot of land to make the land more usable. If these improvements have a useful life, they should be depreciated. If there is no way to estimate a useful life, then do not depreciate the cost of the improvements. If land is being prepared for its intended purpose, then include these costs in the cost of the land asset. They are not depreciated

The monetary value of an asset decreases over time due to use, wear and tear or obsolescence. This decrease is measured as depreciation. Machinery, equipment, currency are some examples of assets that are likely to depreciate over a specific period of time.

In accounting terms, depreciation is defined as the reduction of recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible.

In accounting, book value is the value of an asset according to its balance sheet account balance. For assets, the value is based on the original cost of the asset less any depreciation, amortization or impairment costs made against the asset

Salvage value is an estimate of the residual amount you will receive when you dispose of the asset. Salvage value helps to measure depreciation expense of the asset for every year from the cost of the asset. It is residual income which arises from the sale of the asset therefore the depreciation is also calculated on the basis of how much salvage value arises from the sale of asset so the depreciation is result from the asset minus salvage value