16 Problem 07-36 (Algo) [LO 7-10] points A&Z incurred $452,500 of capitalized costs to develop a uranium mine. The corporation's geologists estimated that the mine would produce 905,000 tons of ore. During the year, 181,000 tons were extracted and sold. A&Z's gross revenues from the sales totaled $579,200, and its operating expenses for the mine were $173,760. Required: Calculate A&Z's depletion deduction. 5 Mc Graw Hill > Answer is complete but not entirely correct. Depletion deduction $ 90,500 × < Prev 16 of 20 Next > Return to question

16 Problem 07-36 (Algo) [LO 7-10] points A&Z incurred $452,500 of capitalized costs to develop a uranium mine. The corporation's geologists estimated that the mine would produce 905,000 tons of ore. During the year, 181,000 tons were extracted and sold. A&Z's gross revenues from the sales totaled $579,200, and its operating expenses for the mine were $173,760. Required: Calculate A&Z's depletion deduction. 5 Mc Graw Hill > Answer is complete but not entirely correct. Depletion deduction $ 90,500 × < Prev 16 of 20 Next > Return to question

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 6PB: Underwoods Miners recently purchased the rights to a diamond mine. It is estimated that there are...

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7 The Piney Copper Company purchased an ore- bearing tract of land for $10.0M. The geologist for Piney estimated the recoverable copper reserves to be 500,000 tons. During the first year, 50,000 tons were mined and 40,000 tons were sold for $5.0M. Expenses (not including depletion allowances) were $3.0M. (a) What are the percentage depletion and the cost depletion allowances?
Problem 28-12 (IAA) At the beginning of current year, Nilli Company purchased a coal mine for P30,000,000. Removable coal is estimated at 1,500,000 tons. The entity is required to restore the land at an estimated cost of P3,600,000. The land is estimated to have a value of P3,150,000 after restoration. The entity incurred P7,500,000 of development cost preparing the mine for production. During the current year, 450,000 tons were removed and 300,000 tons were sold. What total amount of depletion should be recorded for the current year? а. 11,385,000 b. 10,305,000 3,870,000 d. 7,590,000 с. CS Scanned with CamScanner
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33. Frace company quarries limestone, crushes it and sells it to be used in road building. The entity paid P20,000,000 for a certain quarry. The property can be sold for P6,000,000 after production ceases. Estimated tons of total reserves 20,000,000 Tons quarried through December 31, 2016 8,000,000 Tons quarried in 2017 3,000,000 An engineering study performed in 2017 indicated that on January 1, 2017, 15,000,000 tons of limestone were available. What amount of depletion should be recognized for 2017?
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P14C-H1 The William Company has been offered a seven year contract to haul iron ore. Since this contract would represent new business, the company would have to purchase new trucks costing a total of $350,000 if the contract is accepted. Other data relating to the contract: Net annual cash receipts (before taxes) from the contract $105,000 Cost to replace the truck motors in four years 45,000 Salvage value of the trucks at the end of the contract 18,000 With the motors being replaced after four years, the trucks will have a useful life of seven years. To raise money to help purchase the new trucks, the company will sell several old, fully depreciated trucks for a total selling price of $16,000. The company uses MACRS to compute depreciation for tax purposes and requires a 16% after-tax return on all equipment purchases. The tax rate is 30%. The trucks would be in the MACRS five-year property class. REQUIRED: 1. Compute the net present value of this investment opportunity. Round all…
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Exercise 8. On July 1, 20X1, Hunt Inc. invested $800,000 in a mine estimated to have 800,000 tons of ore of uniform grade. The land is expected to be sold for $80,000 after the ore has been extracted. During the last 6 months of 20X1, 100,000 tons of were mined and sold. a) Prepare the Adjusted Journal Entry to record this Deferred Cost at the end of the year. If we assume that only 80,000 of the 100,000 tons mined in 20X1 were actually sold in this year. Where would the costs of the 20,000 tons of unsold ore be reported? b) Name of Account Date a) Exercise 9. The following are selected transactions of Franco Company for the current year. Based on this information, prepare the Adjusted Journal Entries required at the end of the year. Jan 1- Purchased a small company and recorded goodwill of $150,000. a) How did the purchase of this company generate the asset goodwill of $150,000? Dec 31 Debit Amount Credit Amount b) Show the year end Adjusting Journal Entry if it has been determined…