B. At the beginning of 2019, Minx Company acquired a mine for $950,000. Of this amount, $70,000 was approved to the land value and the remaining portion to the minerals in the mine. Surveys conducted by experts have indicated that approximately 10,000,000 units of the mineral appear to be in the mine. Minx incurred $200,000 of development costs related with this mine prior to any mining of minerals. It also determined that the fair value of its obligation to prepare the land for an alternative use when all of the mineral has been removed was $50,000. During 2019, 2,600,000 units of mineral were mined and 2,300,000 of these units were sold. Instructions Compute the following. The total amount of Mineral depletion for 2019. The amount that is charged as an expense for 2019 for the cost of the minerals sold during 2019.
B. At the beginning of 2019, Minx Company acquired a mine for $950,000. Of this amount, $70,000 was approved to the land value and the remaining portion to the minerals in the mine. Surveys conducted by experts have indicated that approximately 10,000,000 units of the mineral appear to be in the mine. Minx incurred $200,000 of development costs related with this mine prior to any mining of minerals. It also determined that the fair value of its obligation to prepare the land for an alternative use when all of the mineral has been removed was $50,000. During 2019, 2,600,000 units of mineral were mined and 2,300,000 of these units were sold. Instructions Compute the following. The total amount of Mineral depletion for 2019. The amount that is charged as an expense for 2019 for the cost of the minerals sold during 2019.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Q2) B. At the beginning of 2019, Minx Company acquired a mine for $950,000. Of this amount, $70,000 was approved to the land value and the remaining portion to the minerals in the mine. Surveys conducted by experts have indicated that approximately 10,000,000 units of the mineral appear to be in the mine. Minx incurred $200,000 of development costs related with this mine prior to any mining of minerals. It also determined that the fair value of its obligation to prepare the land for an alternative use when all of the mineral has been removed was $50,000. During 2019, 2,600,000 units of mineral were mined and 2,300,000 of these units were sold.
Instructions
Compute the following.
- The total amount of Mineral depletion for 2019.
- The amount that is charged as an expense for 2019 for the cost of the minerals sold during 2019.
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