TRUE OR FALSE

1. Depreciation is an allocation of an assets costs.
2. A company uses the double-declining balance for depreciation. In On January 1, Y1 and asset is purchased for $100,000 and is expected to have a useful life of 4 years. Depreciation expense at the end of Y2 would be $25,000
3. Depreciation provides an estimate of the change in an assets fair value.
4. On October 1, Y4 a company purchases an asset for $30,000. The useful life is 10 years. Depreciation expense for Y4 is $3,000.
5. The rational entity impairment model compares the value in use to the carrying amount to determine the amount of impairment.
6. Cost - residual value = accumulated depreciation.
7. Using the double-declining method of depreciation, residual value is ignored for the depreciation expense calculation.