Categories and Presentation

Question 1

How do land improvements differ from land?

Answer 1

This asset differs from land in that it has a finite useful life and is depreciated

Question 2

List the requirements an assetmust have to be included in plant assets

Answer 2

1. )Currently used in operations;
2. )Have a useful life extending beyond one year;
3. )Have physical substance

Question 3

What are some examples of natural resources on the balance sheet?

Answer 3

Items such as gravel pits, coal mines, tracts of timber land, and oil wells. These are typically referred to as depletable assets

Question 4

How is land classified on the balance sheet if it is held for investment?

Answer 4

It is excluded from Plant assets because it currently is not a productive asset

Question 5

What assets are usually included in the “Plant and Equipment” category of assets on the B/S?

Answer 5

Buildings, machinery and equipment. These assets have a finite useful life and can also be referred to as depreciable assets

Question 6

What is the only asset in the plant asset category that is not depreciable or amortizable?

Answer 6

Land

Question 7

When a building is actively being marketed for sale how will it be treated on the Balance Sheet?

Answer 7

1. )Reclassified as an asset held for sale
2. )It will be classified as a current asset
3. )It will no longer be depreciated

Question 8

What disclosures are required in regards to PP&E?

Answer 8

1. )Range of useful lives of plant assets
2. )Depreciation method of plant assets
3. ) A/D related to plant assets