1. In January 2013, Vorst Co. purchased a mineral mine for $2,820,000 with removable ore estimated at...
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(a) $135,000
(b) $144,000
(c) $150,000
(d) $159,000
2. Turtle Co. purchased equipment on January 2, 2011, for $50,000. The equipment had an estimated 5-year service life with an expected salvage value of $0. Turtle's policy for 5-year assets is to use the double-declining-balance depreciation method for the first two years of the asset's life and then switch to the straight-line depreciation method. In its December 31, 2013, balance sheet, what amount should Turtle report as accumulated depreciation for equipment?
(a) $30,000
(b) $38,000
(c) $39,200
(d) $42,000
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
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