Business, 06.05.2020 06:39 babyari18

Massachusetts Mining Company purchased a gravel pit for $2,800,000. It is estimated that 8 million tons of gravel can be extracted over the pit’s useful life, with a residual value of $400,000. If 3 million tons are extracted and sold during the first year, how much depletion expense should be recorded?

a. $900,000
b. $1,800,000
c. $1,050,000
d. $1,000,000

2. A building was purchased for $250,000 and has a useful life of 20 years, and a residual value of $50,000. After it has been used 4 years, its accumulated depreciation using the straight line method would be (assume a full year of depreciation in the first year):

a. $12,500
b. $50,000
c. $40,000
d. $10,000

3. If an asset cost $48,000 and has a residual value of $8,000 and a useful life of eight years, the depreciation in the third year, using the double-declining balance method, would be (assume a full year of depreciation in the first year):

a. $5,625
b. $6,750
c. $9,000
d. $12,000

4. Johnson Co. purchased land and a building for $90,000. The land was appraised at $30,000 and the building on the land was appraised at $70,000. Based on the appraisals, how much of the $90,000 cost should be allocated to the land?

a. $27,500
b. $25,000
c. $27,000
d. $30,000

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Massachusetts Mining Company purchased a gravel pit for $2,800,000. It is estimated that 8 million t...

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