Chapter 9Plant Assets, Natural Resources, and Intangible Assets

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Learning Objectives

After studying this chapter, you should be able to:

1 Describe how the historical cost principle applies to plant assets.

2 Explain the concept of depreciation and how to compute it.

3 Distinguish between revenue and capital expenditures, and explain the entries for each.

4 Explain how to account for the disposal of a plant asset.

5 Compute periodic depletion of extractable natural resources.

6 Explain the basic issues related to accounting for intangible assets.

7 Indicate how plant assets, natural resources, and intangible assets are reported.

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Feature Story

How Much for a Ride to the Beach?

It's summer vacation. Your plane has landed, you've finally found your bags, and you're dying to hit the Tylösand beach in Halmstad, Sweden—but first you need a “vehicular unit” to get you there. As you turn away from baggage claim, you see a long row of rental agency booths. First, you see booths for Hertz (USA) and Europcar (FRA). Then, a booth at the far end catches your eye—Rent-A-Wreck (USA). Now there's a company making a clear statement!

Any company that relies on equipment to generate revenues must ...

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