Learning Objectives:

After reading this chapter, you should be able to:

1. Determine the amount to record as an asset's cost.



2. Compute and record depreciation of property, plant, and equipment by commonly used methods.



3. Apply the Modified Accelerated Cost Recovery System (MACRS) for federal income tax purposes.



4. Record sales of plant and equipment.



5. Record asset trade-ins using financial accounting rules and income tax requirements.



6. Compute and record depletion of natural resources.



7. Recognize asset impairment and understand the general concepts of accounting for impairment.



8. Compute and record amortization and impairment of intangible assets.



9. Define the accounting terms new to this chapter.