Exam 11: Investments in Noncurrent Operating Assets-Utilization and Retirement

In 2013,Pauley Company paid $1,000,000 to purchase land containing a total estimated 160,000 tons of extractable mineral deposits.The estimated value of the property after the mineral has been removed is $200,000.Extraction activities began in 2014,and by the end of the year,20,000 tons had been recovered and sold.In 2015,geological studies indicated that the total amount of mineral deposits had been underestimated by 25,000 tons.During 2015,30,000 tons were extracted,and 28,000 tons were sold.What is the depletion rate per ton (rounded to the nearest cent)in 2015?

The impairment test for an intangible asset with an indefinite life compares the

Which of the following represents the maximum amortization period mandated by current generally accepted accounting principles for amortizable intangible asset?

Algon Company owns a machine that cost $560,000,has a book value of $240,000,and an estimated fair value of $480,000.Nogal Company has a machine that cost $720,000,has accumulated depreciation of $400,000,and an estimated fair value of $640,000.Algon pays Nogal cash of $160,000.Assume the trade has commercial substance. (1)Record the exchange on Algon Company's books. (2)Record the exchange on Nogal Company's books.