Depletion: Calculating and Journalizing Mineral Works Co. acquired a salt mine at a cost of $1,700,000, with no expected salvage value. The estimated number of units available for production from the mine is 3,400,000 tons. a. During the first year, 200,000 tons are mined and sold. b. During the second year, 600,000 tons are mined and sold. Required: 1. Calculate the amount of depletion expense for both years. Year 1 Year 2

Depletion: Calculating and Journalizing Mineral Works Co. acquired a salt mine at a cost of $1,700,000, with no expected salvage value. The estimated number of units available for production from the mine is 3,400,000 tons. a. During the first year, 200,000 tons are mined and sold. b. During the second year, 600,000 tons are mined and sold. Required: 1. Calculate the amount of depletion expense for both years. Year 1 Year 2

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter18: Accounting For Long-term Assets

Section: Chapter Questions

Problem 12SPA: DEPLETION: CALCULATING AND JOURNALIZING Mineral Works Co. acquired a salt mine at a cost of...

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DEPLETION: CALCULATING AND JOURNALIZING Mineral Works Co. acquired a salt mine at a cost of 1,700,000, with no expected salvage value. The estimated number of units available for production from the mine is 3,400,000 tons. (a) During the first year, 200,000 tons are mined and sold. (b) During the second year, 600,000 tons are mined and sold. REQUIRED 1. Calculate the amount of depletion expense for both years. 2. Prepare general journal entries for depletion expense.
Underwoods Miners recently purchased the rights to a diamond mine. It is estimated that there are two million tons of ore within the mine. Underwoods paid $46,000,000 for the rights and expects to harvest the ore over the next fifteen years. The following is the expected extraction for the next five years. Year 1: 50,000 tons Year 2: 900,000 tons Year 3: 400,000 tons Year 4: 210,000 tons Year 5: 150,000 tons Calculate the depletion expense for the next five years and create the journal entry for year one.
DEPLETION: CALCULATING AND JOURNALIZING Mining Works Co. acquired a copper mine at a cost of 1,200,000, with no expected salvage value. The estimated number of units available for production from the mine is 3,000,000 tons. (a) During the first year, 400,000 tons are mined and sold. (b) During the second year, 700,000 tons are mined and sold. REQUIRED 1. Calculate the amount of depletion expense for both years. 2. Prepare general journal entries for depletion expense.
Gimli Miners recently purchased the rights to a diamond mine. It is estimated that there are one million tons of ore within the mine. Gimli paid $23,100,000 for the rights and expects to harvest the ore over the next ten years. The following is the expected extraction for the next five years. Year 1: 50,000 tons Year 2: 90,000 tons Year 3: 100,000 tons Year 4: 110,000 tons Year 5: 130,000 tons Calculate the depletion expense for the next five years, and create the journal entry for year one.
Depletion: Calculating and Journalizing Mineral Works Co. acquired a salt mine at a cost of $1,925,000, with no expected salvage value. The estimated number of units available for production from the mine is 3,500,000 tons. a. During the first year, 220,000 tons are mined and sold. b. During the second year, 290,000 tons are mined and sold. Required: 1. Calculate the amount of depletion expense for both years. Year 1 Year 2 2. Prepare general journal entries for depletion expense. Page: 1 DOC. POST. DATE ACCOUNT TITLE DEBIT CREDIT NO. REF. 1 Year 1 1 2 3 3 4 Year 2 4 5
Salter Mining Company purchased the Northern Tier Mine for $21 million cash. The mine wasestimated to contain 2.5 million tons of ore and to have a residual value of $1 million.During the first year of mining operations at the Northern Tier Mine, 50,000 tons of ore weremined, of which 40,000 tons were sold.a. Prepare a journal entry to record depletion during the year.b. Show how the Northern Tier Mine, and its accumulated depletion, would appear in SalterMining Company’s balance sheet after the first year of operations. c. Will the entire amount of depletion computed in part a be deducted from revenue in the deter-mination of income for the year? Explain.
Salter Mining Company purchased the Northern Tier Mine for $50 million cash. The mine was estimated to contain 6.47 million tons of ore and to have a residual value of $1.5 million.During the first year of mining operations at the Northern Tier Mine, 55,000 tons of ore were mined, of which 18,000 tons were sold. a. Prepare a journal entry to record depletion during the year. b. Show how the Northern Tier Mine, and its accumulated depletion, would appear in Salter Mining Company's balance sheet after the first year of operations.
Salter Mining Company purchased the Northern Tier Mine for $21 million cash. The mine was estimated to contain 2.5 million tons of ore and to have a residual value of $1 million. During the first year of mining operations at the Northern Tier Mine, 50,000 tons of ore were mined, of which 40,000 tons were sold. a. Prepare a journal entry to record depletion during the year. b. Show how the Northern Tier Mine, and its accumulated depletion, would appear in Salter Mining Company's balance sheet after the first year of operations. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Show how the Northern Tier Mine, and its accumulated depletion, would appear in Salter Mining Company's balance sheet after the first year of operations. (Amounts to be deducted should be indicated by a minus sign) Property, plant, & equipment Accumulated depletion Mining property: Northern Tier Mine Salter Mining Company Balance…
Weber Company purchased a mining site for $617,434 on July 1. The company expects to mine ore for the next 10 years and anticipates that a total of 96,158 tons will be recovered. The estimated residual value of the property is $52,737. During the first year, the company extracted 4,119 tons of ore. The depletion expense is a.$52,737.00 b.$56,469.70 c.$26,448.25 d.$24,189.22
On April 17 of the current year, a mining company purchased the rights to a mine. The purchase price plus additional costs necessary to prepare the mine for extraction of minerals totaled $6,300,000. The company expects to extract 1,050,000 tons of minerals during a four-year period. During the current year, 255,000 tons were extracted and sold immediately. Required: 1. Calculate depletion for the current year. 2. Is depletion considered part of the product cost and included in the cost of inventory? 1. Depletion for the current year 2. Is depletion considered part of the product cost and included in the cost of inventory?
Weber Company purchased a mining site for $525,247 on July 1. The company expects to mine ore for the next 10 years and anticipates that a total of 85,242 tons will be recovered. The estimated residual value of the property is $49,377. During the first year, the company extracted 4,550 tons of ore. The depletion expense is Oa. $47,587.00 Ob. $25,400.72 Oc. $28,036.34 Od. $49,377.00
Dow Deep Mining Co acquired mineral rights for $56,000,000. The mineral deposit is estimated at 70,000,000 tons. During the current year, 18,200,000 tons were mined an a. Determine the depletion rate. It required, round your answer to two decina aces A) Depletion rate per ton.