Accounting Principles 7Th Canadian Edition Volume 2 By Jerry J. Weygandt

Accounting Principles 7th Canadian Edition Volume 2 by Jerry J. Weygandt delves into the intricacies of long-lived assets and the proper accounting principles associated with them. From calculating the cost of property, plant, and equipment to applying depreciation methods, this textbook covers everything an accounting student needs to know about managing these assets effectively.

### Chapter 9: Long-Lived Assets
#### Chapter Study Objectives
1. **Calculate the Cost of Property, Plant, and Equipment:** This involves considering all costs necessary to acquire and prepare the asset for its intended use. The cost includes capital expenditures and asset retirement costs. Allocation of costs is done based on relative fair values in cases of multiple assets or significant components.

2. **Apply Depreciation Methods:** After acquisition, assets are accounted for using the cost model or revaluation model. Depreciation is crucial as it allocates the asset’s cost over its useful life in a systematic manner. Common depreciation methods include straight-line, diminishing-balance, and units-of-production, with each method resulting in the same total depreciation over the asset’s life.

3. **Explain Factors Impacting Depreciation:** Changes in periodic depreciation may occur due to capital expenditures, impairments, fair value fluctuations, or adjustments in useful life/residual value estimates. Impairment losses are recorded if the recoverable amount falls below the carrying amount.

4. **Account for Asset Disposals:** Disposing of assets involves updating depreciation, calculating the carrying amount, determining gains/losses, and removing the asset and accumulated depreciation accounts. Exchanging assets is treated as buying a new asset and selling an old one, with the new asset recorded at fair value compared to the old asset’s carrying amount.

For students seeking additional resources, Accounting Principles 7th Canadian Edition Volume 2 Test Bank provides valuable practice questions and solutions to supplement learning.

### FAQ
**1. What is the importance of depreciation in accounting?**
Depreciation is crucial as it allocates the cost of long-lived assets over their useful lives, ensuring expenses are spread out evenly and reflecting the asset’s wear and tear accurately.

**2. How do capital expenditures impact periodic depreciation?**
Capital expenditures during an asset’s useful life may necessitate a revision in depreciation to account for the increased asset value and benefits derived over time.

**3. How are asset impairments handled in accounting?**
When the recoverable amount of an asset falls below its carrying amount, an impairment loss must be recorded, adjusting the asset’s value downward and reflecting the loss in the financial statements.

### Conclusion
Mastering the concepts and calculations related to long-lived assets is essential for any accounting professional or student. With clear explanations and examples, Accounting Principles 7th Canadian Edition Volume 2 equips learners with the knowledge needed to manage these assets effectively. Using resources like the Test Bank can further enhance understanding and proficiency in the subject matter.