52) In February 2015, Gemstone Industries mine is estimated to contain 500,000 c

Question

52) In February 2015, Gemstone Industries mine is estimated to contain 500,000 carats of stone and to have a residual value after mine and sold. In this situation: purchased the Opal Mine at a cost of $20,000,000. The of 1,000,000 ng operations are completed. During 2015, 50,000 carats of stone were removed from the A) The mine is classified as an intangible asset and amortized over a period not to exceed 40 years B) The amount of depletion deducted from revenue during 2015 is $1.900,000 C) The amount of depletion deducted from revenue during 2015 is S$1,000,000. D) The book value of the mine is $19,000.000 at the end of 2015 for cash of $150,000. The original cost of the asset was 3600,000. Cranston recognized a gain of $22.500 on the sale. What was the amount of accumulated depreciation on the asset at the time of its sale? 53) Cranston Instrumentation sold a depreciable asset D) $127,500. B) $495,000. C) $577,500. A) $472,500. 54) Intangible assets are assets used in business operations but which A) Cannot be specifically identified. B) Lack physical substance. C) Have been depreciated below their estimated salvage values. D) Cannot be sold. D) Goodwill. 55) Which of the following would morbe amortized? C) Copyright. A) Patent. B) Franchise fee. A) The corporation pays tax on its income and the stockholders pay tax on their dividends. B) The corporation pays tax on its income and the officers of the corporation pay tax on their 56) Double Taxation means: salaries C) A corporation must pay double the amount of tax that an unincorporated business pays. D) A corporation pays taxes to the federal government and to the state government. 57) Assets contributed to a partnership by a partner would be recorded at: A) Cost less depreciation. C) Book value. B) Fair market value. D) Historical cost. 58) Net income in a partnership may not be distributed to the partners: A) As interest on beginning capital. C) As a salary allowance. B) In a fixed ratio. D) In the form of dividends.

Explanation / Answer

52)

Amount of depletion during 2015 = (20000000 - 1000000)/500000 *50000

= 38 * 50000 = 1900000

Answer is B

53)

Book Value of asset = 150000 - 22500 = 127500

Accumulated depreciation = 600000 - 127500 = 472500

Answer is A.

54)

Answer is B.

55)

Answer is B.

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