财务会计课件 from Professor CarterChapter09Word下载.docx

财务会计课件 from Professor CarterChapter09Word下载.docx

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Becauseproperty,plant,andequipmentprovidebenefitsthroughtheirphysicalform,theyareexamplesoftangibleassets.Somelong-livedassets,suchascopyrights,trademarks,andpatents,arevaluablebecausetheyprovidelegalbenefits,notphysicalbenefits.Forexample,youcannotdrivearoundtowninacopyright,butitdoesprotectyourcompanyfromothercompaniessellingcomputersoftwareyourcompanydeveloped.Resourcesthatprovidebenefitsinnon-physicalformarecalledintangibleassets.

Intermsoftheaccountingequation,property,plant,andequipmentareassets,asshownbelow.Thenumbersinparenthesesrefertothechaptersinwhichtheitemsarediscussed.

Assets

CurrentAssets

Cashandcashequivalents（6）

Accountsreceivable（7）

AllowanceforUncollectibleAccounts（7）

Merchandiseinventory（8）

Property,plant,andEquipment（9）

=

Liabilities

+

Stockholders'

Equity

Revenues

Sales（7）

SalesReturns&

Allowances（7）

CostofGoodsSold（8）

OperatingExpenses

UncollectibleAccountsExpense（7）

BankServiceExpense（6）

OtherRevenues&

Expenses

InterestRevenue（6）

InterestExpense（6）

Theamountofproperty,plant,andequipmentdiffersfromcompanytocompany.Forexample,ExxonMobil,thelargestoilandgascompanyintheUnitedStates,reportedproperty,plant,andequipmentof$139billiononDecember31,2009.This$139billionwasapproximately60%ofExxonMobil’sDecember31,2009totalassets.RoyalDutchShell,thelargestoilandgascompanyoutsideoftheUnitedStates,reportedproperty,plant,andequipmentof$132billiononDecember31,2009.The$132billionwasapproximately45%ofRoyalDutchShell’sDecember31,2009totalassets.Oneyearearlier,onDecember31,2008,ExxonMobil’sproperty,plant,andequipmentwere$121billionorapproximately53%ofExxonMobil’stotalassets.

TheNatureofProperty,Plant,andEquipment

Property,plant,andequipmentpresentdifficultiesformanagersbecausetheyareoftenquitelargeindollaramountandbecausetheyaffectmorethanoneaccountingperiod.Thelargedollaramountsofproperty,plant,andequipmentrequiremanagerstoexercisemuchcarebeforeinvestinginsuchresources.Forexample,ExxonMobilspentmorethan$57billiononproperty,plant,andequipmentduringthethreeyearsendedDecember31,2009.Toputthisisperspective,considerduringthisthree-yeartimeperiodExxonMobil'

snetincomewasapproximately$108billion.Thus,ExxonMobilinvestedinproperty,plant,andequipmentmorethan50%ofalladditionalresourcesitsmanagementgeneratedthroughoperatingthecompanyinthethreeyears.Whenmanagementmakesdecisionsinvolvingsuchlargedollaramounts,theymustbeverycarefulbecausetheresourcescannotbequicklygeneratedthroughoperations.Iftheproperty,plant,andequipmentpurchasesprovetobemistakes,thecompanymayhavetooperateforseveralyearstorecoverthedollaramountslostthroughpoordecisions.

Aseconddifficultypresentedbyproperty,plant,andequipmentisthatastheyareusedup,thedollaramountusedupinagivenperiodmustbereportedasanexpenseonthatperiod'

sincomestatement,similartothemannerinwhichsuppliesexpenseandinsuranceexpensemustbereported.Thisrequiresmanagerstobeabletomeasuretheamountoftheassetusedupinanygivenperiod.Measuringthedollaramountofproperty,plant,andequipmentusedupismuchmoredifficultthanmeasuringtheamountofsuppliesorprepaidinsuranceusedup.Forexample,itisrelativelyeasytodeterminetheamountofinsuranceTargetusedupinayear.ThisdollaramountisspecifiedintheinsurancecontractsTargetnegotiatedwithitsinsurancecompanies.Ontheotherhand,todeterminethedollaramountofaTargetstorethathasbeen"

usedup"

inayearmaybeverydifficult.Eventhoughyouknowthebuildingwilleventuallywearoutorbecometooinefficienttobeused,itisvirtuallyimpossibletodeterminehowmuchofthewearandtearorobsolescenceisduetoanyspecificyear.Theseandotheraccountingissuesarisingasaresultofowningproperty,plant,andequipmentwillbeexploredinthischapter.

SourcesofProperty,Plant,andEquipment

Therearetwoprimarysourcesofproperty,plant,andequipment.First,companiesconvertsomeoftheirotherresourcesintoproperty,plant,andequipment.Forexample,afteracompanycollectscashforitsaccountsreceivable,itcouldusesomecashtopurchaseasalesterminal,computer,desk,ordeliverytruck.Secondly,companiesborrowcashanduseittoacquireproperty,plant,andequipment.Forexample,acompanycouldborrow$10,000,000fromabankandusethecashtobuylandandabuilding.Ofcourse,itisalsopossibleforcompaniestoacquireproperty,plant,andequipmentbyobtainingcashfromownersandthenusingthecashtoobtainproperty,plant,andequipment.Althoughpossible,thissourceisnotnearlyascommonascompaniesconvertingotherresourcesintoproperty,plant,andequipmentorborrowingcashtoacquirethem.

Convertingotherresourcesintoproperty,plant,andequipmentWhenacompanyconvertsoneormoreresourcesintoproperty,plant,andequipment,theeffectonthecompanyisitstotalresourcesandtotalsourcesofresourcesremainunchanged.Forexample,considertheeffectofacompanyusing$25,000cashtopurchaseadeliverytruck.Thepurchaseofthedeliverytruckincreasesthecompany'

sresources（assets）by$25,000.Ontheotherhand,thecompany'

scashpaymentdecreasesitsresourcesby$25,000.Thus,thecompany'

stotalresourcesremainunchanged,asshownbelow.

Total

Resources

SourcesofBorrowedResources

Sourcesof

OwnerInvestedResources

ManagementGeneratedResources

+$25,000

-$25,000

Atthetimethecompanyreceivesthetruckandpaysforit,itwouldrecordanincreaseinthelong-livedasset,DeliveryTrucks,andadecreaseinitscashresource.Ifyourememberassetsincreasewithdebitsandajournalentrymusthavedebitsequaltocredits,theprocessofrecordingthedeliverytruckpurchaseisquitesimple,asshownbelow.

Date

Description

Posting

Ref.

Debits

Credits

Dec.2

DeliveryTrucks

171

25,000

Cash

111

Deliverytruckpurchase

Inactualbusinesspractice,companiesusevariousaccountnamesforrecordingproperty,plant,andequipment,suchasadeliverytruck.Othercommonaccountnamesincludetransportationequipment,autosandtrucks,anddeliveryequipment.

Borrowingresourcestoacquireproperty,plant,andequipmentDuetothelargedollaramountsoftenrequiredforthepurchaseofproperty,plant,andequipment,mostcompaniesborrowcashtobuysuchassets.Thecashisusuallyborrowedformanyyears.Hopefully,theproperty,plant,andequipmentwillgeneratemorethanenoughcashtoallowthecompaniestorepaytheamountborrowedandstillhaveenoughcashleftforthecompaniestouseforotherpurposes.Thisisonewaycompaniesincreasetheirresourcesovertime.

AswillbeexplainedindetailinChapter11,cashisoftenborrowedforlongperiodsoftimethroughcompaniesissuingbonds.Whencompaniesissuebonds,theyreceivecashresources.Sincethesourceofthecashwasborrowing,bondsrepresentliabilitiestotheissuingcompany.Forexample,ifacompanyborrows$10,000,000cashbyissuing$10,000,000inbonds,thecompany'

sresources（cash）wouldincreaseby$10,000,000anditssourcesofresources（bondspayable）wouldalsoincreaseby$10,000,000,asseenbelow.

+$10,000,000

Atthetimethecompanyreceivesthecash,itwouldrecordanincreaseincashandanincreaseinitsliabilitybondspayable.Sinceassetsincreasewithdebitsandajournalentrymusthavedebitsequaltocredits,theprocessofrecordingthereceiptofcashisquitesimple,asshownbelow.

Dec.9

10,000,000

BondsPayable

221

Issueoflong-termbonds

Ifthecompanyusesthe$10,000,000cashtobuyl