Colorado Mining paid $564.000 to acquire a mine with 47,000 tons of coal reserves. The financial statements model shown on the last tab reflects Colorado Mining's financial condition just prior to purchasing the coal reserves. The company extracted 24.675 tons of coal in year 1 and 21150 tons in year 2 Required a. Compute the depletion charge per unit b-1. Compute the depletion expense for years 1 and 2 in a financial tements. b-2. Record the acquisition of the coal reserves and the depletion expense for years 1 and 2 in a financial statements model.

Colorado Mining paid $564.000 to acquire a mine with 47,000 tons of coal reserves. The financial statements model shown on the last tab reflects Colorado Mining's financial condition just prior to purchasing the coal reserves. The company extracted 24.675 tons of coal in year 1 and 21150 tons in year 2 Required a. Compute the depletion charge per unit b-1. Compute the depletion expense for years 1 and 2 in a financial tements. b-2. Record the acquisition of the coal reserves and the depletion expense for years 1 and 2 in a financial statements model.

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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The Weber Company purchased a mining site for $573,259 on July 1. The company expects to mine ore for the next 10 years and anticipates that a total of 94,508 tons will be recovered. During the first year the company extracted 4,359 tons of ore. The depletion expense is a.$51,961.60 b.$23,966.29 c.$26,459.13 d.$53,643.00
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Solare Company acquired mineral rights for $287,200,000. The diamond deposit is estimated at 35,900,000 tons. During the current year, 3,660,000 tons were mined and sold. a. Determine the depletion rate.$fill in the blank 5df5b004305d067_1 per ton b. Determine the amount of depletion expense for the current year.$fill in the blank 5df5b004305d067_2 c. Journalize the adjusting entry to recognize the depletion expense. If an amount box does not require an entry, leave it blank. Dec. 31 fill in the blank 0ae001fa5fd7fc8_2 fill in the blank 0ae001fa5fd7fc8_3 fill in the blank 0ae001fa5fd7fc8_5 fill in the blank 0ae001fa5fd7fc8_6
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