Of the following costs related to the development of mi one is not a part of depletion cost?
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- ccounting 1). Intangible drilling costs are costs associated with drilling an oil and gas well to the point of completion. An Integrated Oil and Gas company is allowed to deduct these costs in what manner? a. Cost Depletion b. 100% Expensed c. 70% Expensed and 30% Capitalized & Amortized d. 100% Amortized6. Evaluate the following statements: S1. When buildings and improvements are constructed in connection with the removal of natural resources and their usefulness is limited to the duration of the project, the depreciation should be recognized on an output basis similar to the one used for the natural resource itself. S2. The acquisition cost of wasting assets includes the purchase price and developmental costs, such as drilling costs, sinking mine shafts, and constructing roads. a. True, True b. False, True c. True, False d. False, FalseWhich one of the following items is not a consideration when recording periodic depreciation expense on plant assets? Question 21 options: Salvage value Estimated useful life Cash needed to replace the plant asset Cost
- Characteristics of Depreciation Methods Below is a common list of depreciation methods and characteristics related to depreciation. Depreciation Methods a. Straight-line depreciation method b. Declining balance depreciation method c. Units-of-production depreciation method when actual units produced increases over the life of the asset Characteristics 1. Results in depreciation expense that decreases over the life of the asset. 2. Results in depreciation expense that increases over the life of the asset. 3. Allocates the same amount of cost to each period of a depreciable assets life. 4. Calculated by multiplying a constant depreciation rate by depreciable cost. 5. Calculated by applying a constant depreciation rate to the assets book value at the beginning of the period. 6. Results in lowest income taxes in early years of the assets life. 7. Consistent with the matching principle. Required: Match one or more of the depreciation methods with each characteristic.Which of the following items is not a consideration when recording periodic depreciation on plant assets? Question 9 options: Salvage value Estimated useful life Cash needed to replace the plant asset Cost34a 34 - Which of the following statements about depreciation is false? a) The asset to be depreciated should be among the assets of the enterprise. B) Proportional depreciation method can be applied for all tangible fixed assets. NS) For a property, plant and equipment to be depreciated, its economic life must be more than one year. D) As a result of use, wear, tear, depreciation or obsolescence must be experienced in the tangible asset. TO) Depreciation is a type of expense that does not require a cash outflow.
- Which one of the following items is not a consideration when recording periodic depreciation expense on plant assets? a. Salvage value b. Estimated useful life c. Cash needed to replace the plant asset d. CostDetermining Fixed Asset's Book Value The balance in the equipment account is $3,100,000, and the balance in the accumulated depreciation—equipment account is $1,581,000. a. What is the book value of the equipment?$fill in the blank 1 b. Does the balance in the accumulated depreciation account mean that the equipment's loss of value is $1,581,000? , because depreciation is an allocation of the of the equipment to the periods benefiting from its use.26. haracteristics of Depreciation Methods In each dropdown below is a list of common depreciation methods and characteristics related to depreciation. Required: Select one or more of the depreciation methods with each characteristic. 1. Results in depreciation expense that decreases over the life of the asset 2. Results in depreciation expense that increases over the life of the asset 3. Allocates the same amount of cost to each period of a depreciable asset's life 4. Calculated by multiplying a constant depreciation rate by depreciable cost 5. Calculated by applying a constant depreciation rate to the asset's book value at the beginning of the period 6. Results in lowest income tax expense in early years of the asset's life 7. Consistent with the matching process Options: Straight-line depreciation method Declining balance depreciation method Units-of-production depreciation method when actual units produced increases over the life of the asset All of these…
- Which statement is INCORRECT about subsequent measurement of intangible assets? Q7 Select one: a. When using the cost model an entity should estimate the estimated useful life as well as the estimated residual value if the asset is determined to have an indefinite useful life b. When using the cost model an entity should estimate the estimated useful life as well as the estimated residual value if the asset is determined to have a definite useful life. c. The same model chosen by an entity should be used for all intangible assets in the same class. d. Intangible assets may be measured using either the cost model or the revalued cost model.Which of the following statements are true about the revaluation model perIAS 16 Property, Plant and Equipment?1) Excess depreciation as a result of a revaluation exercise can betransferred between reserves2) Depreciation must be charged based on the historical cost of theasset3) All assets of the same class must be revalued4) Valuations must be independent and carried out regularly Which is correct ?a) 1, 3 and 4b) All of the abovec) 1 and 3d) 2, 3 and 4Net income is understated if, in the first year, estimated salvage value is excluded from the depreciation computation when using the Straight-lineMethod Production orUse Method 1. Yes Yes 2. No Yes 3. Yes No 4. No No
