Compute the total cost of goods sold for 2020.
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1. The Fairy Company purchased a site for limestone quarry for P 100,000 on January 2, 2020. It estimates that the quarry will yield 400,000 tons of limestone. It estimates that its retirement obligation has a fair value of P 20,000 after which the land can be sold for P 10,000. In 2020, 80,000 tons were quarried and 60,000 tons sold. Cost of production (excluding depletion) are P4 per ton.
Compute the total cost of goods sold for 2020.
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- Required Information [The following information applies to the questions displayed below.] Project A requires a $365,000 initial investment for new machinery with a five-year life and a salvage value of $42,000. The company uses straight-line depreciation. Project A is expected to yield annual net income of $25,300 per year for the next five years. Compute Project A's payback period. Choose Numerator: Payback Period 7 Choose Denominator: = Payback Period Payback period =The Bruin's Den Outdoor Gear is considering a new 7-year project to produce a new tent line. The equipment necessary would cost $1.95 million and be depreciated usi$882,038 $991,492 $854,426 $750,550 $1,103,426ng straight-line depreciation to a book value of zero. At the end of the project, the equipment can be sold for 15 percent of its initial cost. The company believes that it can sell 30,500 tents per year at a price of $78 and variable costs of $37 per tent. The fixed costs will be $535,000 per year. The project will require an initial investment in net working capital of $249,000 that will be recovered at the end of the project. The required rate of return is 12.1 percent and the tax rate is 21 percent. What is the NPV? A. $882,038 B. $991,492 C. $854,426 D. $750,550 E. $1,103,426Q3) 4. The following information has been taken from the accounting records of Manufacturing company for year December, 2019: Particulars Amount Raw materials inventory, January 1 $500,000 Raw materials inventory, December 31 50,000 Selling expenses 50,000 Utilities, factory 50,000 Direct labor cost 100,000 Depreciation, factory 120,000 Purchase of raw materials 2,500,000 Sales 5,000,000 Insurance, factory 50,000 Supplies, factory 20,000 Administrative expenses 150,000 Indirect labor 200,000 Maintenance, factory 100,000 Work in progress inventory, January 1 150,000 Work in progress inventory, December 31 100,000 Finished goods inventory, January 1 250,000 Finished goods inventory, December 31 150,000 Management wants these date organized in a better format so that financial statements can be prepared for the…
- 8. On January 1, 2018, Stefan company purchased a mining site that will have to be restored to certain specifications when the mining production ceases. The cost of the mining site is 6,000,000 and the restoration cost is expected to be 1,500,000. It is estimated that the mine will continue in operation for 10 years. The appropriate discount rate is 8%. The present value of 1 at 8% for 10 periods is 0.4632. On December 31, 2027, the entity contracted with another entity for the restoration of the mining site in accordance with specifications at a cost of 1,350,000. How much is the decommissioning liability on January 1, 2018?MINA MINING CO. has acquired a tract of mineral land for P50,000,000. Mina Mining estimates that the acquired property will yield 150,000 tons of ore with sufficient mineral content to make mining and processing profitable. It further estimates that 7,500 tons of ore will be mined the first and last year and 15,000 tons every year in between. (Assume 11 years of mining operations.) The land will have a residual value of P1,550,000. Mina Mining builds necessary structures and sheds on the site at a total cost of P12,000,000. The company estimates that these structures can be used for 15 years but, because they must be dismantled if they are to be moved, they have no residual value. Mina Mining does not intend to use the buildings elsewhere. Mining machinery installed at the mine was purchased secondhand at a total cost of P3,600,000. The machinery cost the former owner P9,000,000 and was 50% depreciated when purchased. Mina Mining estimates that about half of this machinery will still…GIVEN: Project C requires $800,000 net initial investment for new machinery with a 8-year life and a Salvage Value of $40,000. The company uses straight-line depreciation. Project C is expected to yield an annual Net Income of $65,000 per year. What is the Payback Period using the above information? A) 5 years B) 6 years C) 7 years D) 8 years E) None of the above
- Required Information [The following information applies to the questions displayed below.] Project A requires a $365,000 initial investment for new machinery with a five-year life and a salvage value of $42,000. The company uses straight-line depreciation. Project A is expected to yield annual net income of $25,300 per year for the next five years. Compute Project A's accounting rate of return. Choose Numerator: Accounting Rate of Return I Choose Denominator: = Accounting Rate of Return Accounting rate of returnOn March 1, 2024, a company entered into an agreement with the state to obtain the rights to operate a mineral mine for $6 million. The mine is expected to produce 155,000 tons of mineral. As part of the agreement, the company agrees to restore the land to its original condition after mining operations are completed in approximately five years. Management has provided the following possible outflows for the restoration costs that will occur five years from now: (PV of $1. PVA of $1) Cash Outflow $ 520,000 675,000 830,000 Probability 20% 30% 50% The company's credit-adjusted risk-free interest rate is 9%. During 2024, the company extracted 27,900 tons of ore from the mine. How much accretion expense will the company record in its income statement for the 2024 calendar year? Multiple ChoiceOn January 1, 2018, Spring Co. purchased a land for $12,000,000. Thecompany expected to extract 2,000,000 tons of mine from this land overthe next 20 years at which time, the residual value of the asset shall bezero. During 2018 and 2019 operations, 60,000 tons were mined each yearand sold for P80 per ton. The estimate of the remaining lifetime capacityof the mine was raised to 2,400,000 tons at the start of 2020 and theresidual value was to be $960,000. How much should be recognized asdepletion in 2020 if the total production for 2020 is 100,000 tons?
- 6) A company is considering purchasing a new automated machine that is expected to generate an additional income of $125,000 annually. The equipment will have an initial cost of $187,500 and estimated annual operating and maintenance costs of $50,000. Its estimated salvage value at the end of its useful life of 4 years will be $37,500. The equipment is a MACRS-GDS 3-year property for calculating depreciation deductions. The effective tax rate is 35%. For this new machine, determine the after-tax cash flow for each year of operation. (Round off values to the nearest dollar) ΕΟΥ BTCF a) 0 1 2 3 4 MACRS-GDS Deduction Taxable Income Tax ATCF b) (8 points) If the after-tax MARR is 10% per year compounded annually, compute the PW of the after-tax cash flows. Based on this PW, would you recommend the purchase of this new equipment?LeMonde Coal Company buys a coal mine for $1 Million. The mine has a residual value of $200,000, and is expected to yield 100,000 tonnes of coal. If LeMonde Coal Company extracts 5000 tonnes of coal this year, calculate the amount to be credited to accumulated amortization.Sum-of-the-year's-digits. Jon Seceda Furnace Corp. purchased machinery for $315,000 on May 1, 2020. It is estimated that it will have a useful life of 10 years, salvage value of $15,000, production of 240,000 units, and working hours of 25,000. During 2021, Seceda Corp. uses the machinery for 2,650 hours, and the machinery produces 25,500 units My understanding of the equation is (Cost-Salvage Value) x Depreciation Fraction = Depreciation Charge. My calculation: ($315,000-$15,000) x 10/55 = 54,545.45 Bartely's answer (which is correct): ($315,000-$15,000) x 10/55 x 4/12 = 18,181.81 ($315,000-$15,000) x 9/55 x 8/12 = 32,727.27 Sum-of-the-Years'-digits = 50,909.08 (add 18,181.81 and 32,727.27) My question is where does the fractions (4/12 and 8/12) come from?
