Dep

Question 0

Depletion rate is

Answer 0

Depletion base/ est. removable ore available

Question 1

Depletion base=

Answer 1

Price, estimated restoration cost

Development cost less expected salvage.

Question 2

Depletion expense is

Answer 2

(Rate)(amt sold)..eg. [2.4][60 tons sold]

Question 3

Double declining balance=

Answer 3

2(1/N)X NBV

Question 4

Depreciation calculation is based on

Answer 4

FMV- Salvage value

Or cost- sal

Question 5

Accelerated dep would reflect asset incurs increasing repairs with use

Answer 5

Units of depreciation is when assets declines with use

Question 6

Group is for groups of similar assets

Composite is for collection of dissimilar assets.

Answer 6

Both uses SL dep!!!

Question 7

Tricky question : which method used will accumulated dep = the original cost when there’s is a 15% salvage value?

Answer 7

None because if accumulated dep = original cost, then asset has to be dep to 0 which is impossible is there is a salvage value!!

Question 8

Permanent impairment loss is added

Answer 8

to accumulated depreciation.

Question 9

Composite life=

Answer 9

Total dep base / total annual dep

Question 10

So for the investment account using equity method:

It will be increased by payment of investment, the income, minus div and amort of asset in excess of cv and FV

Answer 10

Do not amort asset in Cost method !!