When Calculating Depletion, What Is the Proper Treatment of Residual

question 161

Multiple Choice

When calculating depletion, what is the proper treatment of residual value?

• A)There is no residual value in the calculation of depletion expense.
• B)The residual value is subtracted from cost to determine the depletable base.
• C)The residual value is added to cost to determine the depletable base.
• D)Residual value is ignored until the end of the asset's life at which time it is used to limit the final year's expense amount.

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