Bedox during the year purchased a coal mine for 2,000,000. It cost 500,000 to prepare the coal mine for the extraction of the coal. It was estimated that 750,000 tons of coal would be extracted from the mine during its useful life. Bedox planned to sell the property for the amount of 100,000 at the end of its useful life. During the current year, 15,000 tons of coal were extracted and sold. What will be the depletion amount per ton for the current year?

Bedox during the year purchased a coal mine for 2,000,000. It cost 500,000 to prepare the coal mine for the extraction of the coal. It was estimated that 750,000 tons of coal would be extracted from the mine during its useful life. Bedox planned to sell the property for the amount of 100,000 at the end of its useful life. During the current year, 15,000 tons of coal were extracted and sold. What will be the depletion amount per ton for the current year?

Name: Bedox during the year purchased a coal mine for 2,000,000. It cost 50
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: Bedox during the year purchased a coal mine for 2,000,000. It cost 500,000 toprepare the coal mine for the extraction of the coal. It was estimated that750,000 tons of coal would be extracted from the mine during its useful life..Bedox planned to se

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Perez Company acquires an ore mine at a cost of $2,380,000. It incurs additional costs of $666,400 to access the mine, which is estimated to hold 1,700,000 tons of ore. 215,000 tons of ore are mined and sold the first year. The estimated value of the land after the ore is removed is $340,000. Calculate the depletion expense from the information given. record the cost of the o mine and year end adjusting entry
Cullumber, Inc. is considering the purchase of a warehouse directly across the street from its manufacturing plant. Cullumber currently warehouses its inventory in a public warehouse across town. Rent on the warehouse and delivering and picking up inventory cost Cullumber $50880 per year. The building will cost Cullumber $477000. Cullumber will depreciate the building for 20 years. At the end of 20 years, the building will have a $132500 salvage value. Cullumber's required rate of return is 12%. Click here to view the factor table. Using the present value tables, the building's net present value is (round to the nearest dollar) O $1017600. O $46077. O $393783. O $-83217.
Compute the annual depreciation to be charged, beginning with 2022. (Round answer to O decimal places, e.g. 45,892.) Annual depreciation expense-building %24
Bumps Unlimited, a highway contractor, must decide whether to overhaul a tractor and scraper or replace it. The old equipment was purchased 5 years ago for $130,000; it had a 12-year projected life. If traded for a new tractor and scraper, it can be sold for $60,000. Overhauling the equipment will cost $20,000. If overhauled, O&M cost will be $25,000/year and salvage value will be negligible in 7 years. If replaced, a new tractor and scraper can be purchased for $150,000. O&M costs will be $12,000/year. Salvage value after 7 years will be $35,000. Using a 15% MARR and an annual worth analysis, should the equipment be replaced?
Company I purchased a piece of land for its natural resources at a cost of $1,500,000. The land is expected to have a salvage value of $250,000. A lumber expert visited the property and estimated the property to have 500,000 pounds of timber. The first year, the company logged 350,000 pounds of timber, and the second year, another 250,000 pounds of timber were logged. Calculate the depletion expense rate AND calculate the depletion expense the company should recognize in Year 1 and Year 2:
Shelton Company purchased a parcel of land six years ago for $869,500. At that time, the firm invested $141,000 in grading the site so that it would be usable. Since the firm wasn't ready to use the site itself at that time, it decided to lease the land for $52,000 a year. The company is now considering building a warehouse on the site as the rental lease is expiring. The current value of the land is $921,000. What value should be included in the initial cost of the warehouse project for the use of this land? Multiple Choice A. $1,010,500 B. $869,500 C. $1,062,000 D. $921,000 E. SO
Builtrite is considering purchasing a new machine that would cost $60,000 and the machine would be depreciated (straight line) down to $0 over its five-year life. At the end of four years, it is believed that the machine could be sold for $30,000. The current machine being used was purchased 3 years ago at a cost of $40,000 and it is being depreciated down to zero over its 5-year life. The current machine's salvage value now is $12,000. The new machine would increase EBDT by $56,000 annuall Builtrite's marginal tax rate is 34%. What is the TCF associated with the purchase of this new machine if it is sold at the end of year 4? Ⓒ$30,000 $23,880 $20,500 $19,800
The Darlington Equipment Company purchased a machine 5 years ago at a cost of $85,000. The machine had an expected life of 10 years at the time of purchase, and it is being depreciated by the straight-line method by $8,500 per year. If the machine is not replaced, it can be sold for $5,000 at the end of its useful life. A new machine can be purchased for $170,000, including installation costs. During its 5-year life, it will reduce cash operating expenses by $45,000 per year. Sales are not expected to change. At the end of its useful life, the machine is estimated to be worthless. The new machine is eligible for 100% bonus depreciation at the time of purchase. The old machine can be sold today for $50,000. The firm's tax rate is 25%. The appropriate WACC is 9%. If the new machine is purchased, what is the amount of the initial cash flow at Year 0 after bonus depreciation is considered? Cash outflow should be indicated by a minus sign. Round your answer to the nearest dollar.$…
In 1990, Sheridan Company completed the construction of a building at a cost of $860,000 and fırst occupied it in January 1991. It was estimated that the building would have a useful life of 40 years and a salvage value of $26,000 at the end of that time. Early in 2001, an addition to the building was constructed at a cost of $215,000. At that time, it was estimated that the remaining life of the building would be, as originally estimated, an additional 30 years, and that the addition would have a life of 30 years and a salvage value of $9,000. In 2019, it is determined that the probable life of the building and addition will extend to the end of 2050, or 20 years beyond the original estimate. (a) Using the straight-line method, compute the annual depreciation that would have been charged each year from 1991 through 2000. Annual depreciation from 1991 through 2000 $ / yr %24
Depletion Expense Prepare the entry to record the cost of the ore mine and year-end adjusting entry. General Journal View transaction list Journal entry worksheet < A B Record the cost of the ore mine in cash. Transaction 1 Note: Enter debits before credits. General Journal Debit Credit
J. F. Manning Metal Company is considering the purchase of a new millingmachine during year 0. The machine's base price is $135,000, and it will cost another $15,000 to modify the machine for special use by the firm, resulting in a $150,000 cost base for depreciation. The machine falls into the MACRS seven-year property class. The machine will be sold after three years for $80,000 (actual dollars). Use of the machine will require an increase in net working capital (inventory) of $10,000 at the beginning of the project year. The machine will have no effect on revenues, but it is expected to save the firm $80,000 (today's dollars) per year in before-tax operating costs-mainly labor. The firm's marginal tax rate is 40%, and this rate is expected to remain unchanged over the project's duration. However, the company expects that the labor cost will increase at an annual rate of 5% and that the working-capital requirement will grow at an annual rate of 8% caused by inflation. The selling…
Calligraphy Pens is deciding when to replace its old machine. The machine's current salvage value is $3,050,000. Its current book value is $1,800,000. If not sold, the old machine will require maintenance costs of $710,000 at the end of the year for the next five years. Depreciation on the old machine is $360,000 per year. At the end of five years, it will have a salvage value of $155,000 and a book value of $0. A replacement machine costs $4,650,000 now and requires maintenance costs of $380,000 at the end of each year during its economic life of five years. At the end of the five years, the new machine will have a salvage value of $745,000. It will be fully depreciated by the straight-line method. In five years, a replacement machine will cost $3,650,000. The company will need to purchase this machine regardless of what choice it makes today. The corporate tax rate is 25 percent and the appropriate discount rate is 7 percent. The company is assumed to earn sufficient revenues to…