question archive 1) The book value of a plant asset is a
1) The book value of a plant asset is a
Subject:BusinessPrice:2.87 Bought7
1) The book value of a plant asset is
a. the fair market value of the asset at a balance sheet date.
b. the asset's acquisition cost less the total related depreciation recorded to date.
c. equal to the balance of the related accumulated depreciation account.
d. the assessed value of the asset for property tax purposes.
2) During 2017, Logan Corporation acquired a mineral mine for $4,000,000 of which $400,000 was ascribed to land value after the mineral has been removed. Geological surveys have indicated that 10 million units of the mineral could be extracted. 2017, 1, 500,000 units were extracted and 1, 250,000 units were sold. What is the amount of depletion expensed for 2017?
a. $400,000.
b. $450,000.
c. $300,000.
d. $540,000.
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
Answer:
1.
BOOK VALUE IS ORIGINAL COST LESS ACCUMLATED DEPRECIATION...
SO ANSWER IS BOOK VALUE OF PLANT ASSETS IS B ORIGINAL COST LESS TOTAL RELATED DEPRECIATION TO RECORD DATE
2.
CALCULATION OF DEPLETION :
ORIGINAL COST-SALVAGE VALUE/ TOTAL UNIT CAN BE EXTRACTED
= 4000000-400000/10000000
DEPLETION RATE =0.36
SO DURING 2017 1500000 MINERAL EXTRACTED SO (1500000*.36)=540000
SO ANSWER IS D 540000....
