DepletionOn January 2, 2019, Whistler Company purchased land for $480,000, from which it is estimated that 370,000 tons of ore could be extracted. It estimates that the present value of the cost necessary to restore the land is $89,000, after which it could be sold for $29,000.During 2019, Whistler mined 85,000 tons and sold 56,000 tons. During 2020, Whistler mined 110,000 tons and sold 111,000 tons. At the beginning of 2021, Whistler spent an additional $90,000, which increased the reserves by 65,000 tons. In 2021, Whistler mined 154,000 tons and sold 160,000 tons. Whistler uses a FIFO cost flow assumption.Required:If required, round the depletion rate to the nearest cent and round the final answers to the nearest dollar.Question Content Area1. Calculate the depletion included in the income statement and ending inventory for 2019, 2020, and 2021.2019Depletion deducted from income$fill in the blank d2d600ff0fa6007_1 Depletion included in inventory$fill in the blank d2d600ff0fa6007_2 2020Depletion deducted from income$fill in the blank d2d600ff0fa6007_3 Depletion included in inventory$fill in the blank d2d600ff0fa6007_4 2021Depletion deducted from income$fill in the blank d2d600ff0fa6007_5 Depletion included in inventory$fill in the blank d2d600ff0fa6007_6 Question Content Area2. Complete the natural resources section of the balance sheet on December 31, 2019, 2020, and 2021, assuming that an accumulated depletion account is used.Whistler CompanyBalance Sheet (partial)December 31, 2019 - 2021December 31, 2019 Mineral ore resources$fill in the blank 842acb029fb7023_1 Less: Accumulated depletionfill in the blank 842acb029fb7023_2 $fill in the blank 842acb029fb7023_3 December 31, 2020 Mineral ore resources$fill in the blank 842acb029fb7023_4 Less: Accumulated depletionfill in the blank 842acb029fb7023_5 $fill in the blank 842acb029fb7023_6 December 31, 2021 Mineral ore resources$fill in the blank 842acb029fb7023_7 Less: Accumulated depletionfill in the blank 842acb029fb7023_8 $fill in the blank 842acb029fb7023_9 Question Content Area3. Assume Whistler's discount rate was 9%. What is the balance in the asset retirement obligation at 2019, 2020, and 2021?Whistler CompanyAsset retirement obligation2019 - 2021December 31, 2019$fill in the blank 86b74ffc700b006_1December 31, 2020$fill in the blank 86b74ffc700b006_2December 31, 2021$fill in the blank 86b74ffc700b006_3

Given data To calculate the depletion on income and ending inventory for the year 2019, 2020. 2021…

Answered: Assume Whistler's discount rate was 9%.…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question Content Area

1. Calculate the depletion included in the income statement and ending inventory for 2019, 2020, and 2021.

2019	Depletion deducted from income	$fill in the blank d2d600ff0fa6007_1
	Depletion included in inventory	$fill in the blank d2d600ff0fa6007_2
2020	Depletion deducted from income	$fill in the blank d2d600ff0fa6007_3
	Depletion included in inventory	$fill in the blank d2d600ff0fa6007_4
2021	Depletion deducted from income	$fill in the blank d2d600ff0fa6007_5
	Depletion included in inventory	$fill in the blank d2d600ff0fa6007_6

Question Content Area

2. Complete the natural resources section of the balance sheet on December 31, 2019, 2020, and 2021, assuming that an accumulated depletion account is used.

Whistler CompanyBalance Sheet (partial)December 31, 2019 - 2021

December 31, 2019

Mineral ore resources	$fill in the blank 842acb029fb7023_1
Less: Accumulated depletion	fill in the blank 842acb029fb7023_2
		$fill in the blank 842acb029fb7023_3

December 31, 2020

Mineral ore resources	$fill in the blank 842acb029fb7023_4
Less: Accumulated depletion	fill in the blank 842acb029fb7023_5
		$fill in the blank 842acb029fb7023_6

December 31, 2021

Mineral ore resources	$fill in the blank 842acb029fb7023_7
Less: Accumulated depletion	fill in the blank 842acb029fb7023_8
		$fill in the blank 842acb029fb7023_9

Question Content Area

3. Assume Whistler's discount rate was 9%. What is the balance in the asset retirement obligation at 2019, 2020, and 2021?

Whistler CompanyAsset retirement obligation2019 - 2021

December 31, 2019	$fill in the blank 86b74ffc700b006_1
December 31, 2020	$fill in the blank 86b74ffc700b006_2
December 31, 2021	$fill in the blank 86b74ffc700b006_3

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