If a contingent liability is reasonably estimable and it is reasonably possible that the contingency will occur, the contingent liability

	A.	should be disclosed in the notes accompanying the financial statements.
	B.	should not be recorded or disclosed in the notes until the contingency actually happens.
	C.	should be recorded in the accounts.
	D.	must be paid for the amount estimated.

A coal company invests $16 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 expense for the first year?

	A.	$320,000
	B.	$800,000
	C.	$80,000
	D.	Cannot be determined from the information provided.

Larime Company purchased equipment for $40,000 on January 1, 2010, and will use the double-declining-balance method of depreciation. It is estimated that the equipment will have a 5-year life and a $2,000 salvage value at the end of its useful life. The amount of depreciation expense recognized in the year 2012 will be

	A.	$9,120.
	B.	$5,760.
	C.	$5,472.
	D.	$9,600.