When the usefulness of plant assets used to extract natural resources is directly related to the...

Question

Question

When the usefulness of plant assets used to extract natural resources is directly related to the depletion of a natural resou

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

ANSWER: True

EXPLANATION:

For such plant assets, aforesaid depreciation method is prescribed

Add a comment

Answer 2

Similar Homework Help Questions

When the usefulness of plant assets used to extract natural resources is directly related to the...

When the usefulness of plant assets used to extract natural resources is directly related to the depletion of a natural resource, their costs are depreciated using the units-of-production method of depreciation, as long as the assets will not be moved to and used at another site when extraction of the natural resources is complete. True or False
- UIT PLISIJU. o provide cash necessary to replace plant assets when they are used up....

- UIT PLISIJU. o provide cash necessary to replace plant assets when they are used up. O record the balance sheet amount of plant assets at replacement value. o match expenses with revenues using a reasonable systematic method. gain a better understanding of estimating the extraction of natural resources. Question 6 The process of expensing the cost of patents over an extended period of years is referred to as: classification depletion. depreciation. amortization.
Depletion is the same as depreciation but used for natural resources. True False

Depletion is the same as depreciation but used for natural resources. True False

Question 16 (1 point) Clark Oil and Gas incurred costs of $15.3 million for the rights...

Question 16 (1 point) Clark Oil and Gas incurred costs of $15.3 million for the rights to extract resources from a natural gas deposit. The company expects to extract 8 million cubic feet of natural gas during a six-year period. Natural gas extracted during years 1 and 2 were 800,000 and 1,600,000 cubic feet, respectively. What was total depletion for year 1 and year 2, assuming the company uses the units-of-production method? $5.10 million. $3.06 million $8.00 million $4.59 million....
Current Attempt in Progress Information related to property, plant, and equipment natural resources, and goodwill on...

Current Attempt in Progress Information related to property, plant, and equipment natural resources, and goodwill on December 31, 2021, for Sandhill Company is as follows: land $348,400, building $1,114,200, accumulated depreciation-building $634,600, goodwill $415,000, nickel mine $566,000, and accumulated depletion-oickel mine $106,100. Prepare a partial balance sheet for Sandhill Company. (List Property. Plant and Equipment in order of Land, Buildings and Mine.) SANDHILL COMPANY Balance Sheet (Partial) Assets
Chapter 9: Plant assets, natural resources, and intangible assets 1/ What is the depletion cost per...

Chapter 9: Plant assets, natural resources, and intangible assets 1/ What is the depletion cost per barrel if a newly discovered oil well costs $6 million to acquire, drilling permits cost $525,000, and site preparation costs are $800,000? Assume that the well will yield 15 million barrels of oil and have no salvage value. (Round the answer to the nearest penny.) 2/Beacon Petroleum purchased an operational oil well for $8 million and expects to extract 16 million barrels over the...

Question 17 (1 point) An activity-based method is most often used to allocate the cost of...

Question 17 (1 point) An activity-based method is most often used to allocate the cost of natural resources over its useful life because: This method generally results in the highest amount of assets in the earlier years. This is the simplest method, and natural resource activity is hard to estimate. The usefulness of natural resources generally is directly related to the amount of the resources extracted. This method generally results in the highest amount of assets in the later years....
Recording Entries Related to the Purchase and Depletion of Natural Resources On May, 1, 2020, Star...

Recording Entries Related to the Purchase and Depletion of Natural Resources On May, 1, 2020, Star Mines Inc. purchased an ore mine for $1,800,000 to access an estimated 933,000 tons of ore. The company incurred development costs of $135,000 related to the mine and purchased equipment for the mine for $270,000 with a useful life of 8 years. The equipment has no use outside of this mine project. The company is expected to restore the land for alternative uses after...
Natural resources are: Multiple Choice Tangible assets used in the operations of the business. Consumable assets...

Natural resources are: Multiple Choice Tangible assets used in the operations of the business. Consumable assets such standing timber, mineral deposits, and oil and gas fields. Not subject to allocation to expense over their useful lives. Current assets because they are depleted. Depleted using a straight-line method.

Question 1 (1 point) Biological assets are valued at fair value less estimated costs to sell...

Question 1 (1 point) Biological assets are valued at fair value less estimated costs to sell under International Financial Reporting Standards (IFRS). True False Question 2 (1 point) Changes in the estimates involved in depreciation, depletion, and amortization require retroactive restatement of financial statements. True False Question 3 (1 point) Any method of depreciation should be both systematic and rational. e True False Question 4 (1 point) A change in the estimated recoverable units used to compute depletion requires retroactive...

When the usefulness of plant assets used to extract natural resources is directly related to the...

Homework Answers