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a. What is LCM's cost depletion for years 1, 2, and 3?

a. What is LCM's cost depletion for years 1, 2, and 3?

FINANCIAL ACCOUNTING
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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Required information. [The following information applies to the questions displayed below.) Last Chance Mine (LCM) purchased a coal deposit for $2,305,050. It estimated it would extract 18,150 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.18 million, $4.5 million, and $3.3 million for years 1 through 3, respectively. During years 1-3, LCM reported net income (loss) from the coal deposit activity in the amount of ($11,500), $737,500, and $647,500, respectively. In years 1-3, LCM extracted 19,150 tons of coal as follows: (1) Tons of Coal (2) Banis $2,305,050 Depletion (2)/(1) Rate $127.00 Tons Extracted per Year Year 1 2,300 Year 2 11,350 Year 3 5,500 18.150 Note: Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars. c. Using the cost and percentage depletion computations from parts (a) and (b), what is LCM's actual depletion expense for each year? Answer is complete but not entirely correct. Depletion Expense Year 1 $ 0 Year 2 S 00 Year 3 $ 0×
Transcribed Image Text:Required information. [The following information applies to the questions displayed below.) Last Chance Mine (LCM) purchased a coal deposit for $2,305,050. It estimated it would extract 18,150 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.18 million, $4.5 million, and $3.3 million for years 1 through 3, respectively. During years 1-3, LCM reported net income (loss) from the coal deposit activity in the amount of ($11,500), $737,500, and $647,500, respectively. In years 1-3, LCM extracted 19,150 tons of coal as follows: (1) Tons of Coal (2) Banis $2,305,050 Depletion (2)/(1) Rate $127.00 Tons Extracted per Year Year 1 2,300 Year 2 11,350 Year 3 5,500 18.150 Note: Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars. c. Using the cost and percentage depletion computations from parts (a) and (b), what is LCM's actual depletion expense for each year? Answer is complete but not entirely correct. Depletion Expense Year 1 $ 0 Year 2 S 00 Year 3 $ 0×
Required information [The following information applies to the questions displayed below.] Last Chance Mine (LCM) purchased a coal deposit for $2,305,050. It estimated it would extract 18,150 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.18 million, $4.5 million, and $3.3 million for years 1 through 3, respectively. During years 1-3, LCM reported net income (loss) from the coal deposit activity in the amount of ($11,500), $737,500, and $647,500, respectively. In years 1-3, LCM extracted 19,150 tons of coal as follows: (1) Tons of Coal 18,150 (2) Basis) (2)/(1) Rate $2,305,050 Depletion: $127.00 Tons Extracted per Year Year 1 2,300 Year 21 11,350 Year 3 5,500 Note: Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars. a. What is LCM's cost depletion for years 1, 2, and 3? Answer is complete but not entirely correct. Cost Depletion Year 1 Year 2 $ Year 3 0 × 0× 0x
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] Last Chance Mine (LCM) purchased a coal deposit for $2,305,050. It estimated it would extract 18,150 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.18 million, $4.5 million, and $3.3 million for years 1 through 3, respectively. During years 1-3, LCM reported net income (loss) from the coal deposit activity in the amount of ($11,500), $737,500, and $647,500, respectively. In years 1-3, LCM extracted 19,150 tons of coal as follows: (1) Tons of Coal 18,150 (2) Basis) (2)/(1) Rate $2,305,050 Depletion: $127.00 Tons Extracted per Year Year 1 2,300 Year 21 11,350 Year 3 5,500 Note: Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars. a. What is LCM's cost depletion for years 1, 2, and 3? Answer is complete but not entirely correct. Cost Depletion Year 1 Year 2 $ Year 3 0 × 0× 0x
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