8. Gimli Miners recently purchased the rights to a diamond mine. It is estimated that there are one million tons of ore within the mine. Gimli paid $23,100,000 for the rights and expects to harvest the ore over the next ten years. The following is the expected extraction for the next five years. • Year 1: 50,000 tons Year 2: 90,000 tons • Year 3: 100,000 tons Year 4: 110,000 tons Year 5: 130,000 tons Calculate the depletion expense for the next five years, and create the journal entry for year one.

8. Gimli Miners recently purchased the rights to a diamond mine. It is estimated that there are one million tons of ore within the mine. Gimli paid $23,100,000 for the rights and expects to harvest the ore over the next ten years. The following is the expected extraction for the next five years. • Year 1: 50,000 tons Year 2: 90,000 tons • Year 3: 100,000 tons Year 4: 110,000 tons Year 5: 130,000 tons Calculate the depletion expense for the next five years, and create the journal entry for year one.

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Description: 8. Gimli Miners recently purchased the rights to a diamond mine. It is estimated that there areone million tons of ore within the mine. Gimli paid $23,100,000 for the rights and expectsto harvest the ore over the next ten years. The following is the

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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3.XYZ drilling company purchased a high-end CNC milling center at $500,000 two years ago. The expected life of this machine is 10 years and the salvage value at that time $100,000. The company has done a major upgrading for the CNC machine last year, costed $15,000. The company has also spent $150,000 on its material handling system including a docking station, a rotation table, two pallets and an automatic loading/unloading robot arm. The CNC operating cost is $45,000 per year. Due to the recent oil price down turn this year, the company is contemplating to change the business to truck repair, and considering to replace the said CNC machine with a truck repair elevation platform. The current market value for the CNC machine is $250,000; while the supporting machinery would be valued very little, only $10,000, due to their specific functionality and the bad economy situation.What is the total sunk cost related to this replacement decision? Select one: a. $100,000 cross out b. $505,000…
Ten investors invested an amount of P 75 million each for coal mining at Sierra Madre Mountain. It is expected that the mine contains 5, 000, 000 tons of coal ores and due to latest technology, it can mine 125, 000 tons of unprocessed ores. The management expects an annual expenses of P 35 million, an annual miscellaneous expenses of P 12 million and milling, drilling and other procedural expenses yearly costs P 815 per ton of unprocessed ores of coal. After such process, 85% of the coal ores produces an income of P 1, 750 per ton. a) Find the annual depletion cost of the mine. b) Ten years after operation, the management annual expenses decreases an amount of P 4 million, annual miscellaneous expenses becomes P13 million and procedural expenses becomes P 920 per ton of unprocessed ores. After procedural process, 75% of unprocessed ores produces an income of P 1, 850 per ton. What would then be its average depletion cost annually for the remaining years of the mine?
1. Batinah Water Desalination project is a 15 year project. The project manager estimated that net initial investment expend in year zero is 100 million rials. The investment will be depreciated on a straight line basis to a 10 million book value by enc the project. During the operating phase revenue per year is 35 million and expense per year is estimated to be 20 million ria per year for 15 years. In year 15 net salvage value is estimated to be 15 million. WACC is estimated to be 10%. Tax Rate 209 1. Calculațe annual depreciation expenses 2. Calculate cash flow after tax CFAT in year 5 3. Calculate net present value. 4. Is it a good project Only final answers are required
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13
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7. Gimli Miners recently purchased the rights to a diamond mine. It is estimated that there are one million tons of ore within the mine. Gimli paid $3114 for the rights and expects to harvest the ore over the next ten years. The following is the expected extraction for the next five years. Year 1: 50,000 tons Year 2: 90,000 tons Year 3: 100,000 tons Year 4: 110,000 tons Year 5: 130,000 tons Calculate the depletion expense for the next five years, and create the Journal entry for year one.
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