• Identify the expenditures that should be included in an operational asset account ,that is, what expenditure should be capitalized. • How to account for acquisition of assets with deferred payment (interest bearing and non-interest bearing notes), donation, exchange, and with equity securities. (Problem) • How to account for disposition of assets and record of gain or losses • Understand lump-sum purchase of assets (journal entry) • Understand fixed assets turnover ratio =Net sales/ average total assets Average total assets= (Beg Bal total assets ENDING bal of total assets)/2 Fixed asset turnover ratio= Net sales/(Beg Bal total assets ENDING bal of total assets)/2 • How to compute interest capitalization Step 1: dollar amount (weighted accumulated expenditure) Step 2: identify interest rates to be used in the calculatin Step 3: calculate interest= Dollar amount * Interest • How to account for subsequent expenditures.