Colorado Mining paid $750,000 to acquire a mine with 50,000 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 26,250 tons of coal in year 1 and 22,500 tons in year 2. RequiredCompute the depletion charge per unit.b-1. Compute the depletion expense for years 1 and 2 in a financial statements.b-2. Record the acquisition of the coal reserves and the depletion expense for years 1 and 2 in a financial statements model. Complete this question by entering your answers in the tabs below.Req AAssetsRecord the acquisition of the coal reserves and the depletion expense for years 1 and 2 in a financial statements model. (In the Cash Flow column, use OA to designateoperating activity, IA for investment activity, or FA for financing activity. If the element is not affected by the event, leave the cell blank. Enter any decreases to accountbalances and cash outflows with a minus sign. Round final answers to the nearest whole dollar amount. Not all cells will require entry.)Req B1CoalReservesCashAcquisition of coal reserves708,400 +Depletion for Year 1Depletion for Year 2Reg B2Balance SheetLiabilities ++++COLORADO MININGHorizontal Statements ModelStockholders' EquityCommonStock708,400 ++Income Statement< Req B1Revenue Expenses =RetainedEarningsNetIncome1-Req B2 >Statement of CashFlowsShow less

Depletion Cost Is a Method Of Allocating The Cost To Natural Resources Extracted. Depletion Charge…

Answered: Colorado Mining paid $750,000 to…

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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Colorado Mining paid $750,000 to acquire a mine with 50,000 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 26,250 tons of coal in year 1 and 22,500 tons in year 2.

Required

Compute the depletion charge per unit.

b-1. Compute the depletion expense for years 1 and 2 in a financial statements.

b-2. Record the acquisition of the coal reserves and the depletion expense for years 1 and 2 in a financial statements model.

Complete this question by entering your answers in the tabs below.
Req A
Assets
Record the acquisition of the coal reserves and the depletion expense for years 1 and 2 in a financial statements model. (In the Cash Flow column, use OA to designate
operating activity, IA for investment activity, or FA for financing activity. If the element is not affected by the event, leave the cell blank. Enter any decreases to account
balances and cash outflows with a minus sign. Round final answers to the nearest whole dollar amount. Not all cells will require entry.)
Req B1
Coal
Reserves
Cash
Acquisition of coal reserves
708,400 +
Depletion for Year 1
Depletion for Year 2
Reg B2
Balance Sheet
Liabilities +
+
+
+
COLORADO MINING
Horizontal Statements Model
Stockholders' Equity
Common
Stock
708,400 +
+
Income Statement
< Req B1
Revenue Expenses =
Retained
Earnings
Net
Income
1-
Req B2 >
Statement of Cash
Flows
Show less

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