(BQ) Part 2 book "Financial accounting" has contents: Reporting and interpreting bonds, reporting and interpreting owners’ equity, statement of cash flows, analyzing financial statements, reporting and interpreting liabilities. | Confirming Pages LEARNING OBJECTIVES After studying this chapter, you should be able to: 1. Define, classify, and explain the nature of long-lived productive assets and interpret the fixed asset turnover ratio. p. 389 Lecture Presentation LP-8 2. Apply the cost principle to measure the acquisition and maintenance of property, plant, and equipment. p. 391 3. Apply various cost allocation methods as assets are held and used over time. p. 396 4. Explain the effect of asset impairment on the financial statements. p. 406 5. Analyze the disposal of property, plant, and equipment. p. 408 6. Apply measurement and reporting concepts for natural resources and intangible assets. p. 409 7. Explain how the acquisition, use, and disposal of long-lived assets impact cash flows. p. 414 386 24/06/10 2:43 PM Confirming Pages C H A P TER EIGHT REPORTING AND INTERPRETING PROPERTY, PLANT, AND EQUIPMENT; NATURAL RESOURCES; AND INTANGIBLES A s of December 31, 2009, Southwest Airlines operated 537 Boeing 737 aircraft, providing service to 68 domestic cities in 32 states, and was the largest . air carrier in number of originating passengers boarded and number of scheduled domestic departures. Southwest is a capital-intensive company with nearly $11 billion in property, plant, and equipment reported on its balance sheet. In fiscal year 2009, Southwest spent $585 million on aircraft and other flight equipment as well as ground equipFOCUS COMPANY: ment. Since the demand for air travel is seasonal, with peak demand occurring during the summer months, planning for optimal productive capacity MANAGING PRODUCTIVE CAPACITY in the airline industry is very difficult. FOR THE LOW-FARE LEADER Southwest’s managers must determine how many aircraft are needed in which cities at what points in time to fill all seats demanded. Otherwise, the company loses revenue (not enough seats) or incurs higher costs (too many seats). Demand
