1.

On January 1, Platinum Enterprises purchased the mining rights to a tract of land containing an estimated 160,000 tons of platinum for $1,430,000. The company estimated it would take 5 years to extract the platinum. During the year, the company extracted and sold 15,000 tons of platinum for $40,000.

How much depletion cost should be recognized during the year by Platinum Enterprises?

Select one:

a. $240,000

b. $121,875

c. $134,063

d. $220,000

2.

Accounting for the amortization of intangible assets is similar to which depreciation method?

Select one:

A. Straight-line

B. Double-declining balance

C. Units-of-production

D. Sum-of-the-year's digits

3.

The Kimball Company paid $24,600 to acquire a 100 ton press. Freight charges to deliver the equipment amounted to $1,700 and were paid by S&D. Installation costs amounted to $870, and machine testing charges amounted to $450.

What amount should be capitalized to the Equipment account?

Select one:

a. $12,500

b. $22,500

c. $20,500

d. $27,620

4.

The Belpre Company purchased an office building for $2,733,000. The building had an estimated useful life of 25 years and an expected salvage value of $302,500.

What is the depreciation expense for year two using the straight-line method?

Select one:

a. $97,220

b. $80,100

c. $113,875

d. $160,200

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