167.In computing depletion, salvage value is

a.always immaterial.

b.ignored.

c.impossible to estimate.

d.included in the calculation.

168.If a mining company extracts 1,500,000 tons in a period but only sells 1,200,000 tons,

a.total depletion on the mine is based on the 1,200,000 tons.

b.depletion is recognized on the 1,500,000 tons extracted.

c.depletion is recognized on the 1,200,000 tons extracted and sold.

d.a separate accumulated depletion account is set up to record depletion on the 300,000 tons extracted but not sold.

169.A coal company invests $15 million in a mine estimated to have 20 million tons of coal and no salvage value. It is expected that the mine will be in operation for 5 years. In the first year, 1,000,000 tons of coal are extracted and sold. What is the depletion for the first year?

a.$750,000

b.$300,000

c.$75,000

d.Cannot be determined from the information provided.

170.Accumulated Depletion

a.is used by all companies with natural resources.

b.has a normal debit balance.

c.is a contra-asset account.

d.is never shown on the balance sheet.

171.On July 4, 2017, Wyoming Mining Company purchased the mineral rights to a granite deposit for $1,600,000. It is estimated that the recoverable granite will be 400,000 tons. During 2017, 100,000 tons of granite was extracted and 60,000 tons were sold. The amount of depletion recognized for 2017 would be

a.$200,000.

b.$120,000.

c.$240,000.

d.$400,000.

172.Depletion is computed by multiplying the depletion cost per unit by the

a.total estimated units.

b.total actual units.

c.number of units extracted.

d.number of units sold.

173.Intangible assets are the rights and privileges that result from ownership of long-lived assets that

a.must be generated internally.

b.are depletable natural resources.

c.have been exchanged at a gain.

d.do not have physical substance.

174.Identify the item below where the terms are not related.

a.Equipmentdepreciation

b.Franchisedepreciation

c.Copyrightamortization

d.Oil welldepletion

175.A patent should

a.be amortized over a period of 20 years.

b.not be amortized if it has an indefinite life.

c.be amortized over its useful life or 20 years, whichever is longer.

d.be amortized over its useful life or 20 years, whichever is shorter.

176.The entry to record patent amortization usually includes a credit to

a.Amortization Expense.

b.Accumulated Amortization.

c.Accumulated Depreciation.

d.Patents.