Questions from Intermediate Accounting

Q: Describe cost depletion and percentage depletion. Why is the percentage depletion

Describe cost depletion and percentage depletion. Why is the percentage depletion method permitted?

Q: The following statement appeared in a financial magazine: “RRA—

The following statement appeared in a financial magazine: “RRA—or Rah-Rah, as it’s sometimes dubbed—has kicked up quite a storm. Oil companies, for example, are convinced that...

Q: Shumway Oil uses successful-efforts accounting and also provides full-

Shumway Oil uses successful-efforts accounting and also provides full-cost results as well. Under full-cost, Shumway Oil would have reported retained earnings of $42 million and net income of $4 milli...

Q: Target in 2012 reported net income of $2.9 billion

Target in 2012 reported net income of $2.9 billion, net sales of $69.8 billion, and average total assets of $45.2 billion. What is Target’s asset turnover? What is Target’s return on asset...

Q: What is a modified accelerated cost recovery system (MACRS)? Speculate

What is a modified accelerated cost recovery system (MACRS)? Speculate as to why this system is now required for tax purposes.

Q: Fernandez Corporation purchased a truck at the beginning of 2014 for $

Fernandez Corporation purchased a truck at the beginning of 2014 for $50,000. The truck is estimated to have a salvage value of $2,000 and a useful life of 160,000 miles. It was driven 23,000 miles in...

Q: Lockard Company purchased machinery on January 1, 2014, for $

Lockard Company purchased machinery on January 1, 2014, for $80,000. The machinery is estimated to have a salvage value of $8,000 after a useful life of 8 years. (a) Compute 2014 depreciation expense...

Q: Use the information for Lockard Company given in BE11-2.

Use the information for Lockard Company given in BE11-2. In BE11-2 Lockard Company purchased machinery on January 1, 2014, for $80,000. The machinery is estimated to have a salvage value of $8,000 aft...

Q: Use the information for Lockard Company given in BE11-2.

Use the information for Lockard Company given in BE11-2. In BE11-2 Lockard Company purchased machinery on January 1, 2014, for $80,000. The machinery is estimated to have a salvage value of $8,000 aft...

Q: Some believe that accounting depreciation measures the decline in the value of

Some believe that accounting depreciation measures the decline in the value of fixed assets. Do you agree? Explain.