An asset for drilling was purchased and place in service by a petroleum production company. It's initial investment is 60,000 and it has an estimated SV of $12,000 at the end of an estimated useful life of 14 years. Compute the depreciation amount in the third year and the BV at the end of the 5th year of life by each of these methods; a. Straight line method

An oil company using the successful-efforts method drilled two wells. The first, a dry hole, costP50,000. The second cost P100,000 and had estimated recoverable reserves of 25,000 barrels, ofwhich 10,000 were sold this year. What will be the total expense for the year related to theexploration and production from these two wells? a. P40,000 b. P60,000 c. P 90,000 d. P150,000

Upper Division of Lower Company acquired an asset with a cost of $580,000 and a four-year life. The cash flows from the asset, considering the effects of inflation, were scheduled as follows.   Year Cash Flow 1 $ 210,000   2   250,000   3   285,000   4   320,000       The cost of the asset is expected to increase at a rate of 20 percent per year, compounded each year. Performance measures are based on beginning-of-year gross book values for the investment base. Ignore taxes.   Required: a. What is the ROI for each year of the asset's life, using a historical cost approach? b. What is the ROI for each year of the asset's life if both the investment base and depreciation are determined by the current cost of the asset at the start of each year?

Help please    The following details relate to a particular asset Future Cash flows (per annum) 90,000 Expected period of cash flows 3 years Discount Rate 10% Open market price of asset 210,000 Cost of asset 630,000 Accumulated depreciation 450,000   Calculate both :   a)determine the recoverable amount for this asset        b)Determine whether the asset is impaired