Quiz 9-13 D Flashcards Preview

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Flashcards in Quiz 9-13 D Deck (14):
0

When you are given a purchase price, estimated ore removable, salvage value, development costs and ore removed/sold during the year, how do you calculate depletion expense for the year?

Depletion expense =
(Purchase price + development costs - salvage value)
X (ore removed and sold)/removable ore estimated

1

A note due in 5 years where the interest is calculated at 3% per year and payable when the note is due. The present value of $1 due in 5 years is .6806

How do you calculate the amount that the note should be reported at on the balance sheet?

Maturity amount x present value factor =
(10k + (10k x 3% x 5 years)) x .6806

2

The initial test for determining whether an impairment of the carrying amount of a long lived fixed asset is...

Carrying amount exceeds undiscounted future cash flows

3

Which of the following is Reported on a proprietorship income statement and why?

Depreciation

Proprietor's draw



Depreciation: yes, is an expense incurred in generating income

Proprietor's draw: no, it's a distribution of owners equity to owner,
It does not effect income and is not an expense

4

Reliable is synonymous with...

Faithful representation

5

To be reliable, information about an item must be...

representationally faithful, verifiable and neutral

6

Values assigned to property based on management's estimate of fair value are...

Not representationally neutral and not reliable

7

Debtors gains are calculated based on...

Undiscounted amounts

8

Total future cash payments, including interest, are used to compute...

The gain on troubled debt restructuring

9

Sinking fund:

Current maturities on long term debt include...

Term notes due within 1 year and payments on serial notes
Due within 1 year

10

Non monetary exchanges should be recorded at...

Fair values unless 1 of the 3 criteria are met

11

Name the following 3 criteria, in a monetary exchange, for which if met she be based on carrying amounts?

1 fair value is not determinable

2 exchange transaction is to facilitate sales for customers

3 exchange transaction lacks commercial substance

12

In a nonmonetary exchange, if one of the 3 criteria are met, and inventory given up exceeds fair value...2

1 the inventory given up should be written down and

2 a loss recognized before exchange is recorded

13

Debt ratio equation

Debt ratio = total liabilities/total assets