Lesson Plan 2.4 – Accounting for Property, Plant
and Equipment, and Intangible Assets
Course Title: Accounting II
Lesson Title: Accounting for Property, Plant and Equipment and Intangible
Assets
Specific Objective:
Learn the proper accounting procedures for handling property, plant, and
equipment and intangible assets.
TEKS: 130.167.c.2:
H – generate an income statement for a corporation;
J – produce a balance sheet for a corporation;
4.C. – determine business liquidity;
5.C.,E.,F.,O – identify cost accounting systems such as job order costing,
process costing, activity-based costing, and project costing; compute overhead
rates; apply overhead to jobs; prepare cost of production reports.
TAKS: R1, M10
Performance Objectives:








Identify property, plant, and equipment assets;
Record the initial cost of property, plant, and equipment assets;
Calculate the annual depreciation Expense using Straight-Line method,
Declining Balance method, Sum-of-the-Years’-Digits method, and Units-ofProduction method;
Calculate depreciation for a partial year;
Determine a plant asset’s book value;
Journalize adjusting entries for depreciation;
Record the disposal of a plant asset;
Define accounting terms related to the lesson.
Preparation
Materials and Equipment Checklist:




Overhead projector
Glencoe’s Textbook, Chapter 5, (pp. 142-161), and Demonstration Problems
Century 21’s Textbook, Chapter 6, (pp. 166-184)
Accounting software and spreadsheet software
Teaching Strategies:
Demonstration Problems from textbooks
Sponge/Focus Activity:

Ask your students to identify the types of plant assets required to operate
their school.
Lesson Plan 2.4 - Accounting for Property, Plant and
Equipment, and Intangible Assets
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING II
 Exploring the Real World of Business, (p. 168) from Glencoe’s Textbook
Lesson Content:
See Glencoe’s Textbook, Chapter 6, pp. 168-191, or Century 21’s Textbook,
Chapter 8, pp. 216-242. Here is an outline:
I.
II.
III.
Determining Costs and Depreciation of Plant Assets
A. Property, Plant, and Equipment Assets
B. Determining the Cost of Property, Plant, and Equipment
1.
Equipment
2.
Land
3.
Buildings
4.
Land Improvements
C. Allocating the cost of plant assets
1.
Depreciable cost
2.
Useful life
3.
Calculating depreciation using the Straight-Line method
Calculating and recording depreciation
A. Accelerated methods of depreciation
1.
The Declining-Balance method
2.
The Sum-of-the-Years’-Digits method
B. Comparing the three depreciation methods
C. The Units-of-Production method
D. Calculating depreciation for a partial year
E. Recording depreciation expense
F. Depreciation and income tax reporting
G. Plant asset records
Disposing of plant assets
A. Discarding plant assets
1.
Discarding an asset with no Book Value
2.
Discarding an asset with a Book Value
B. Selling plant assets
1.
Selling an asset at a loss
2.
Selling an asset at a gain
C. Exchanging plant assets
1.
Loss recognized on the exchange of plant assets
2.
Gain not recognized on the exchange of plant assets
D. Other assets
Assessment:
For problems you can use Peachtree Accounting from Glencoe, Glencoe
Accounting Software, Century 21 Accounting Software, or a spreadsheet.

From Glencoe’s Textbook Problems
o Guided Practice
 6-1 Determining and Allocating Asset Cost, p. 174
 6-2 Analyzing a Source Document, p. 174
 6-3 Calculating Depreciation, p. 182
Lesson Plan 2.4 - Accounting for Property, Plant and
Equipment, and Intangible Assets
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING II
 6-4 Discarding a Plant Asset, p. 190
o Independent Practice
 6-5 Using the Units-of-Production method, p. 195
 6-6 Disposing of Plant Assets, p. 195
 6-7 Exchanging a Plant Asset, p. 196
 6-8 Recording Plant Asset Transactions, p. 196-197
 6-9 Spreadsheet Problem: Evaluating Depreciation methods,
p. 197
o Additional Activities: Using Key Terms, Understanding Accounting
Concepts and Procedures, Case Study, Conducting an Audit with Alex,
Internet Connection, and Workplace Skills, pp. 192-193

From Century 21’s Textbook
o Guided Practice
 Work Together: Journalizing asset purchase and property tax
transactions, p. 221
 On Your Own: Journalizing asset purchase and property tax
transactions, p. 221
 Work Together: Calculating and journalizing depreciation,
p. 226
 On Your Own: Calculating and journalizing depreciation, p. 226
 Work Together: Recording the disposal of plant assets, p. 233
 On Your Own: Recording the disposal of plant assets, p. 233
 Work Together: Computing depreciation using various
depreciation methods and calculating depletion, p. 240
 On Your Own: Computing depreciation using various methods
and calculating depletion, p. 241
o Independent Practice
 8-1 Journalizing entries to record buying plant assets, p. 243
 8-2 Calculating and journalizing property tax, p. 243
 8-3 Calculating depreciation using the straight-line method,
p. 243
 8-4 Journalizing annual depreciation expense, p. 244
 8-5 Recording the disposal of plant assets, p. 244
 8-6 Recording the sale of land and building, p. 245
 8-7 Calculating depreciation expense using straight-line,
declining-balance, and sum-of-the-years-digits methods, p. 24
 8-8 Calculating depreciation expense using the production-unit
method, p. 245
 8-9 Calculating depreciation expense using MACRS, p. 246
 8-10 Calculating depletion expense using production-unit
method, p. 246
 8-11 Recording entries for plant assets, p. 246
 8-12 Recording entries for plant assets, p. 247
o Additional Activities: Applied Communication and Cases for Critical
Thinking, p. 247-248

This lesson is also assessed through the Unit Test at the end of the Unit.
Lesson Plan 2.4 - Accounting for Property, Plant and
Equipment, and Intangible Assets
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING II
Additional Resources:
Textbooks:
Guerrieri, Donald J., F. Barry Haber, William B. Hoyt, and Robert E. Turner,
Glencoe Accounting Real-World Applications & Connections, Advanced
Course, Fourth Edition, Glencoe McGraw-Hill: New York, New York.
Ross, Kenton E., CPA, Mark W. Lehman, CPA, Claudia Bienias Gilbertson, CPA,
Robert D. Hanson, Century 21 Accounting Advanced, Anniversary Edition,
Thomson South-Western: Mason, OH, 2003.
Multimedia:
Century 21’s Teacher’s Resource CD
Websites:
http://accounting.swpco.com
Lesson Plan 2.4 - Accounting for Property, Plant and
Equipment, and Intangible Assets
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING II