A coal mine cost $1,004,000 and is estimated to hold 58,000 tons of coal. There is no residual value. During the first year of operations, 11,000 tons are extracted and sold. Calculate depletion per unit. (Round your answer to the nearest cent.)

A coal mine cost $1,004,000 and is estimated to hold 58,000 tons of coal. There is no residual value. During the first year of operations, 11,000 tons are extracted and sold. Calculate depletion per unit. (Round your answer to the nearest cent.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Mertz Company purchased land containing an estimated 5 million tons of ore for a cost of $8,800,000.…

A: Depletion is a recurring cost associated with the use of natural resources. As a result, it is used…

Q: Sergei Company purchases land for $4,000,000 from which it expects to extract 2,000,000 tons of…

A: Given that, Cost of land = $4,000,000 Estimated residual value = $400,000 Expected extract tons of…

Q: Sergei Company purchases land for $4,000,000 from which it expects to extract 2,000,000 tons of…

A: Unit depletion rate = (Cost of the coal mine - residual value) / Estimated tons of coal

Q: Novak Corp. purchased for $5,829,200 a mine that is estimated to have 44,840,000 tons of ore and no…

A: DEPLETIONThis Method is Specially Suited to Mines, Oil Wells, Quarries, Sandpits and Similar Assets…

Q: A laboratory centrifuge costs $79,000 and has a $5530 salvage value with an 8-year recovery period.…

A: Depreciation under double declining balance method is charged at the rate twice of what is used in…

Q: Required information For the last 10 years, Am-Mex Coal has used the cost depletion factor of $2,500…

A: In terms of accountancy, depletion can be defined as a method of reducing the value of a natural…

Q: Weber Company purchased a mining site for $585,330 on July 1. The company expects to mine ore for…

A: Depletion per tons = (Purchased Cost of mining site - estimated residual value) / anticipated tons =…

Q: The Weber Company purchased a mining site for $510,498 on July 1. The company expects to mine ore…

A: Calculation of Depletion rate per tonne Depletion rate per tonne = Purchase price of mining site/…

Q: The depreciation allowance in year four is $ (Round to the nearest dollar.) The BV at the end of…

A: Explanation of Concept Depreciation is the amount which is to be reduced from value of assets to…

Q: Weber Company purchased a mining site for $690,727 on July 1. The company expects to mine ore for…

A: b.$44,598.37

Q: Spacely Sprockets, Inc. invested $4,996,000 for new manufacturing equipment for its plant in Jetson,…

A: Unit of production depreciation calculates depreciation based on the unit of production and ignores…

Q: A machine with a cost of $63,210.00 has an estimated residual value of $4,731.00 and an estimated…

A: Unit of Output method Unit of production depreciation, also called as activity method, calculates…

Q: If 40,000 units were produced in 20X1 and 60,000 were produced in 20X2, what amount of accumulated…

A: The correct option is C. $150,000

Q: Pharoah Company purchased for $4,543,000 a mine that is estimated to have 45,430,000 tons of ore and…

A: Introduction: Depletion: Decreasing value of assets over its useful life period called as Depletion.…

Q: For $18,048,000, R.R. Michaels Refining purchased land which their experts believe to contain 18.8…

A: Introduction: Depreciation: A decrease in the value of fixed assets of the company because of usage,…

Q: News and is calculated to hold 350.000 barrels of oll There is no residual value Which journal entry…

A: The depreciation expense is recorded for the fixed assets of the business. The depletion expense is…

Q: Stumped, Inc., purchased the timber rights for $7,000,000. It is expected to produce a total of…

A: Depletion is an accrual accounting technique used to allocate the cost of extracting natural…

Q: Purity Ice Cream Company bought a new ice cream maker at the beginning of the year at a cost of…

A: Double declining balance method is the method of depreciation in which depreciable is calculated at…

Q: The Weber Company purchased a mining site for $534,246 on July 1. The company expects to mine ore…

A: Wasting assets: These are the assets which will have only a limited useful life and the value of…

Q: Castle Company purchased land containing an estimated 2.5 million tons of ore for a cost of…

A: Depletion charge per ton = (Cost of land containing ore - Cost of land without ore) / Estimated tons…

Q: An engineer for a mining company is called upon to examine a mining property which is for sale and…

A: During the first year, the risky mine will produce $50,000,000 worth of ore. The ore that is…

Q: On July 23 of the current year, Dakota Mining Company pays $7,121,760 for land estimated to contain…

A: Depreciation:Depreciation simply refers to the contineous decline in the depreciable value of…

Q: Salter Mining Company purchased the Northern Tier Mine for $21 million cash. The mine was estimated…

A: DEPLETION EXPENSE This Method is Specially Suited to mines, Oil wells, Quarries, Sandpits and…

Q: On April 17 of the current year, a mining company purchased the rights to a mine. The purchase price…

A: Requirement:-1 Calculation of the depletion for the current year as follows:- Depletion per ton =…

Q: On February 19 of the current year, Quartzite Co. pays $5,400,000 for land estimated to contain 4…

A: Since there are multiple sub parts in the question, answer will be given for first three sub parts…

Q: Morris Associates bought a machine for $82,000 cash. The estimated useful life was five years and…

A: Depreciation expense is the non-cash expense charged on the non-current assets. It is reported on…

Q: Vandeventer Corporation purchased land containing 25.4 million barrels of naphthenic crude oil for…

A: Annual depletion cost: It is the amount by which the cost of natural resource is depleted over an…

Q: The Weber Company purchased a mining site for $580,128 on July 1. The company expects to mine ore…

A: Given, Cost of machone = $580,128 Total tons = 85,978 Depletion expense per ton = (Cost - Salvage…

Q: During the month of August, a mining company has a gross income of P4,200,000 from the production of…

A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…

Q: Leroy Mining Company purchased land containing an estimated 10,000,000 tons of ore for a cost of…

A: Depletion charge per ton :— It is calculated by dividing depletable value by total estimated tons of…

Q: The Weber Company purchased a mining site for $573,259 on July 1. The company expects to mine ore…

A: For the use of natural resources, depletion expenses is charged (against profits). It is most common…

Q: On April 1, Year 1, Fossil Energy Company purchased an oil producing well at a cash cost of…

A: The depletion and depreciation are calculated on the basis of the usage of the different assets…

Q: A 75,000-ton limestone quarry cost $2,000,000 to develop. Annual gross income for the quarry in…

A: Depletion method of depreciation is utilized by entities dealing with extraction of natural…

Q: A coal mine cost $1,002,000. It is estimated to hold 56,000 tons of coal. There is no residual value…

A: Depletion expense is used for natural resources like mining, oil and gas industries, timber. When…

Q: Prepare the December 31 year-end entries to record both the ore deposit depletion and the mining…

A: Depletion expense uses an accrual accounting system to allocate the cost of extracting natural…

Q: The manufacture of folic acid is a competitive business. A new plant costs $100,000 and lasts for…

A: The company evaluates the projects based on cost and benefits. When a company has several options…

Question

A coal mine cost

$1,004,000

and is estimated to hold

58,000

tons of coal. There is no residual value. During the first year of operations,

11,000

tons are extracted and sold. Calculate depletion per unit. (Round your answer to the nearest cent.)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1:- Concept Used

VIEW

Step 2:- Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Pharoah Company purchased for $4,543,000 a mine that is estimated to have 45,430,000 tons of ore and no salvage value. In the first year, 14,040,000 tons of ore are extracted. (a1) Calculate depletion cost per unit. (Round answer to 2 decimal places, e.g. 0.50.) Depletion cost per unit $ per ton Save for Later (a2) The parts of this question must be completed in order. This part will be available when you complete the part above.
A coal mine cost $1,005,000 and is estimated to hold 52,000 tons of coal. There is no residual value. During the first year of operations, 6,000 tons are extracted and sold. Calculate depletion per unit. (Round your answer to the nearest cent.) OA $19.33 OB. $9.67 OC. $4.83 OD. $14.5 ***
The cost of a machine is 9400 RO with a residual value of 400 RO. The estimated units machine will produce is 10,000 units. Actual production in the first year is 6000 units. What is the depreciation for the first year by using units of production method?
Ques. Lakeside Enterprises bought $1,800,000 for a copper mine on January 1, 2022. The business expects having the resources to produce 12,000,000 units of the product. Prepare the journal entry for the month of January to record the depletion expense assuming.
6
Spacely Sprockets, Inc. invested $4,995,000 for new manufacturing equipment for its plant in Jetson, NY. The equipment was anticipated to have a useful life of 11 years, or 29,800 machine hours and a residual value of $507,000. In its first year in operation the equipment was used for 2,180 hours and an additional 2,700 hours in its second year of usage.The Income Statement for years 1 and 2 of Spacely Sprockets, Inc. are shown below.All items rounded to nearest whole dollar. Spacely Sprockets, Inc. Year 1 Year 2 Net Sales $35,590,000 $36,164,000 COGS $23,120,000 $22,978,000 Gross Profit $12,470,000 $13,186,000 Operating Expenses(before adding in Depreciation) $7,650,000 $8,152,000 Income from Operations $4,820,000 $5,034,000 Income Tax Expense (at 30%) $1,446,000 $1,510,200 Net Income $3,374,000 $3,523,800 Round all items to the nearest whole dollar and use rounded values for all future calculations.1. Calculate the depreciation expense for year 1 and 2 using…
Mansukh
Monty Corp. purchased for $5,977,200 a mine that is estimated to have 49,810,000 tons of ore and no salvage value. In the first year, 12,090,000 tons of ore are extracted. (a1) × Your answer is incorrect. Calculate depletion cost per unit. (Round answer to 2 decimal places, e.g. 0.50.) Depletion cost per unit $ eTextbook and Media 0.22 per ton
Your Company has a machine that it uses to make 200,000 units of a component used in its final product. The cost of the machine was $60,000. The machine has a useful life of 5 years and a salvage value of zero at the end of those five years. Annual depreciation on the machine is $12,000. One year of depreciation has been recorded. The per unit variable manufacturing cost of producing the component is $0.05. The only fixed manufacturing cost is the annual depreciation of $12,000 on the stamping machine. Another Company recently offer to supply all of this component for the next four years at $0.07 per unit. If Your Company accepts the offer, the machine would not be needed and could be sold for $35,000. If the order is accepted, what is the total increase or decrease in income over the next four years?
Sands Company purchased mining rights for $500,000. It expects to harvest 1 million tons of ore over the next 5 years. During the current year, Sands mined 350,000 tons of ore. The entry to journalize the depletion would include a
Colorado Mining paid $564.000 to acquire a mine with 47,000 tons of coal reserves. The financial statements model shown on the last tab reflects Colorado Mining's financial condition just prior to purchasing the coal reserves. The company extracted 24,675 tons of coal in year Land 21150 tons in year 2. Required a Compute the depletion charge per unit b-1. Compute the depletion expense for years 1 and 2 in a financial statements. b-2. Record the acquisition of the coalreserves and the depletion expense for years Fand 2 in a financial statements model. Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Compute the depletion charge per unit. Deple charge per unit per ton Reg BTX
This is business algebra please show your work so I can understand the question. Thank you