BU387 Chapter Notes - Chapter 11: Asset, Liquidating Distribution, Book Value
Document Summary
Regardless of whether the cost model or the revaluaion model is chosen to measure assets ater acquisiion, the three major systemaic methods are: straight line method, decreasing charge method, acivity method. Declining balance method = straight line x 2 typically for double declining balance. Or = book value x declining balance rate. Depreciaion expense per hour = cost residual value. If the depreciaion expense per hour is , and in the irst year, 4000 hours are used: Depleion cost per unit = total cost residual value = ,000,000 = /ounce. Liquidaing dividends company may decide to distribute the shareholders a porion of all of their capital investment, which is a dividend greater than the amount of accumulated net income. These dividends are usually equal to the accumulated amount of net income (ater depleion) plus the amount of depleion that has been charged.
