Flashcards in Quiz 9-13 D Deck (14):
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
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
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
Which of the following is Reported on a proprietorship income statement and why?
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
Reliable is synonymous with...
To be reliable, information about an item must be...
representationally faithful, verifiable and neutral
Values assigned to property based on management's estimate of fair value are...
Not representationally neutral and not reliable
Debtors gains are calculated based on...
Total future cash payments, including interest, are used to compute...
The gain on troubled debt restructuring
Current maturities on long term debt include...
Term notes due within 1 year and payments on serial notes
Due within 1 year
Non monetary exchanges should be recorded at...
Fair values unless 1 of the 3 criteria are met
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
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