Exam 11: Depreciation, Impairment, and Disposition

In 2020, Elephant Corporation's financial statements included the following information: Net income.............................................$19,000 Sales........................................................98,000 Total assets, beginning of year................85,000 Total asseets, end of the year....................112,000 Inventory.....................................................70,000 To one decimal, Elephant's return on assets (ROA) for 2020 was

Under the capital cost allowance system, which of the following is NOT relevant?

In January, 2020, Camel Corporation purchased a mine for $2,550,000 with removable ore estimated by geological surveys at 1 million tonnes. The property has an estimated (residual) value of $150,000 after the ore has been extracted. The company incurred $750,000 in development costs preparing the mine for production. During 2020, 250,000 tonnes were removed and 200,000 tonnes were sold. What is the amount of depletion that Camel should expense for 2020?

Monkey Shines Ltd., a Canadian public corporation, owns equipment for which the following year-end information is available: Carrying amount (book value)........................... $\$ 120,000$ Value in use..........................................................102,000 Fairvalue less disposal costs...............................108,000 The recoverable amount to be used in the determination of impairment is

What should a company do if an asset's carrying value exceeds its recoverable amount due to poor estimates? How can companies keep such instances to a minimum?

The rate of return on assets (ROA) is calculated by dividing

On September 25, 2019, Panther Corp. purchased machinery for $336,000. Residual value was estimated to be $15,000. The machinery will be depreciated over eight years using the double-declining-balance method. If depreciation is calculated on the basis of the nearest full month, Panther should record depreciation expense for calendar 2020 on this machinery of

On January 2, 2019, Urban Ltd. purchased equipment to be used in its manufacturing operations. The equipment has an estimated useful life of ten years, and an estimated residual value of $33,000. It was also estimated that the equipment would be used a total of 63,000 hours over its useful life. The depreciation expense for this equipment was $156,000 for calendar 2020, using the units of production method. The machine was used for 7,500 hours in 2020. The acquisition cost of the equipment was