Chapter 30 - Depletion Question 1-2. At the beginning of the year 2021, Wise Corp. purchased a mineral mine for P30,000,000 with removable ore estimated at 1,500,000 tons. After it has extracted all the ore, the entity will be required by law to restore the land to the original conditions at an estimated cost of P2, 500,000. The present value of the estimated restoration cost is P1,800,000. The estimated residual value of the property is P3,000,000 During the current year, the entity incurred P3, 800,000 of cost in developing the property and preparing the mine for production and removed 90,000 tons and sold 70,000 tons of ore. Q1. What amount should be depletable and at what rate per unit? 33,000,000 30.00 per unit b. 27,800,000 : 29.67 per unit 32,600,000 21.73 per unit d. 30,000,000 : 18.97 per unit a. C. Q2. What amount should be reported as depletion for the current year? a. 2,495,700 b. 3,000,000 C. 32,600,000 d. 1,941,000

Chapter 30 - Depletion Question 1-2. At the beginning of the year 2021, Wise Corp. purchased a mineral mine for P30,000,000 with removable ore estimated at 1,500,000 tons. After it has extracted all the ore, the entity will be required by law to restore the land to the original conditions at an estimated cost of P2, 500,000. The present value of the estimated restoration cost is P1,800,000. The estimated residual value of the property is P3,000,000 During the current year, the entity incurred P3, 800,000 of cost in developing the property and preparing the mine for production and removed 90,000 tons and sold 70,000 tons of ore. Q1. What amount should be depletable and at what rate per unit? 33,000,000 30.00 per unit b. 27,800,000 : 29.67 per unit 32,600,000 21.73 per unit d. 30,000,000 : 18.97 per unit a. C. Q2. What amount should be reported as depletion for the current year? a. 2,495,700 b. 3,000,000 C. 32,600,000 d. 1,941,000

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

Natural Resources The Stein Company acquires a copper mine at the cost of $950,000 on January 1. Along with the purchase price Stein pays additional costs associated with development of $75,000. Stein expects the mine will have a salvage value of $125,000 once all the copper has been mined. Best estimates are that the mine contains 300,000 tons of ore. Required a. Prepare the entry to record the purchase of the copper mine. b. Prepare the December 31 year-end adjusting entry to record depletion is 40,000 tons of ore are mined and all the ore is sold. c. Prepare the December 31 year-end adjusting entry to record depletion if 40,000 tons of ore are mined but only 10,000 tons of the ore are sold. Description Debit Credit a. Purchase of Copper mine b. To record depletion on Copper mine. c. Copper inventory To record depletion on Copper mine.
MCQ3 Smitty Inc. wishes to use the revaluation model for this property: Before Revaluation • Building Gross Value 120,000 • Building Accumulated Depreciation 40,000 • Net carrying value 80,000 The fair value for the property is $150,000. Assuming this is the first year of using the revaluation model, what amount would be booked to the Accumulated Depreciation account, if Smitty chooses to use the proportional method to record the revaluation?
4 02:59:09 Perez Company acquires an ore mine at a cost of $2,240,000. It incurs additional costs of $627,200 to access the mine, which is estimated to hold 1,600,000 tons of ore. 210,000 tons of ore are mined and sold the first year. The estimated value of the land after the ore is removed is $320,000. Calculate the depletion expense from the information given. 1. & 2. Prepare the entry to record the cost of the ore mine and year-end adjusting entry. Complete this question by entering your answers in the tabs below. eBook Depletion Expense General Journal Calculate the depletion expense from the information given. Note: Round "Depletion per unit" to 3 decimal places. Cost Salvage Amount subject to depletion Total units of capacity Depletion per unit Units extracted and sold in period Depletion expense Help Save &
Compute the depreciation for 2020 and 2021
VIEW PUncles Current Attempt in Progress On December 31, 2025, Vaughn Inc. has a machine with a book value of $1,222,000. The original cost and related accumulated depreciation at this date are as follows. Machine Less: Accumulated depreciation Book value (a) $1,690,000 Depreciation is computed at $78,000 per year on a straight-line basis. Presented below is a set of independent situations. For each independent situation, indicate the journal entry to be made to record the transaction. Make sure that depreciation entries are made to update the book value of the machine prior to its disposal. Date 468,000 Aug. 31, 2026 $1,222,000 A fire completely destroys the machine on August 31, 2026. An insurance settlement of $559,000 was received for this casualty. Assume the settlement was received immediately. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the…
not use excel
please answer question 19
Natural Resources The Hollister Company acquires a silver mine at the cost of $2,100,000 on January 1. Along with the purchase price Hollister pays additional costs associated with development of $50,000, Hollister expects the mine will have a salvage value of $300,000 once all the silver has been mined. Best estimates are that the mine contains 250,000 tons of ore. Required a: Prepare the entry to record the purchase of the silver mine. b. Prepare the December 31 year-end adjusting entry to record depletion is 60,000 tons of ore are mined and all the ore is sold, c. Prepare the December 31 year-end adjusting entry to record depletion is 60,000 tons of ore are mined but only 15,000 tons of the are are sold Description Credit 4 # Purchase of silver mine # = To record depletion on silver mine Siver inventory To record depletion on silver mine Debit
Haresh
Problem J: On January 1, 2021, the Reddick Company purchased a mining right for P30,000,000. The mine's recoverable ore reserves are estimated to be 4,000,000 tons. Following the extraction of all ore, the company will be obligated by law to return the land to its original state. The present value of the restoration cost is P2,000,000. The company estimated that the property may be sold for P5,000,000. At a cost of P6,000,000, roads were built and other development costs were invested to aid in the extraction and transportation of the mined ore in early 2021. 200,000 tons of ore were extracted and sold in 2021. A new study conducted by a new mining engineer on December 31, 2022, revealed that 5,000,000 tons of ore were available for mining. 225,000 tons of ore were mined and sold in 2022. How much depletion expense should be recognized in 2022?
A diamond mining company has just purchased a new crystal extraction machine that cost $5000 and has an estimated salvage value of $1000 at the end of its 8-year useful life. What is its depreciation in Year 5 using the SOYD method? Question 19 options: a) $786 b) $655 c) $444 d) $859
Qw.25.