F4 - Depreciation

Question 1

If accum dep = cost

Answer 1

then asset has been depreciated to zero

depreciable assets should NOT depreciate below salvage value under any method

Question 2

Depletion base

Answer 2

Cost of land (not cv)
+ development costs to prepare extraction
+ restoration costs
- residual value

Question 3

Composite life

Answer 3

Total depreciable cost (cost - sv) / total annual depreciation

Question 4

Depletion rate

Answer 4

Depletion base / recoverable units

Question 5

if buy machine under contract for down payment of 10,000 + 24 monthly payments of 5,000 and cash equivalent price equals 110,000 -> what amount use to find depreciation?

Answer 5

on transaction date, machine recorded at FMV 110,000, cash credited for 10,000, note payable for 100,000

SL dep = COST of 110,000 - SV / LIFE