E10.23B (LO 3) (Depletion Computations-Minerals) At the beginning of 2025, Allister Com- pany acquired a mine for $990,000. Of this amount, $150,000 was ascribed to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists have indicated that approximately 12,000,000 units of ore appear to be in the mine. Allister incurred $190,000 of develop- ment costs associated with this mine prior to any extraction of minerals. It also determined that the fair value of its obligation to prepare the land for an alternative use when all of the mineral has been removed was $50,000. During 2025, 2,400,000 units of ore were extracted and 2,200,000 of these units were sold. Instructions Compute the following. a. The total amount of depletion for 2025. b. The amount that is charged as an expense for 2025 for the cost of the minerals-sold during 2025.

E10.23B (LO 3) (Depletion Computations-Minerals) At the beginning of 2025, Allister Com- pany acquired a mine for $990,000. Of this amount, $150,000 was ascribed to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists have indicated that approximately 12,000,000 units of ore appear to be in the mine. Allister incurred $190,000 of develop- ment costs associated with this mine prior to any extraction of minerals. It also determined that the fair value of its obligation to prepare the land for an alternative use when all of the mineral has been removed was $50,000. During 2025, 2,400,000 units of ore were extracted and 2,200,000 of these units were sold. Instructions Compute the following. a. The total amount of depletion for 2025. b. The amount that is charged as an expense for 2025 for the cost of the minerals-sold during 2025.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 56P

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(Depletion Computations—Minerals) At the beginning of 2017, Aristotle Company acquired a mine for $970,000. Of this amount, $100,000 was ascribed to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists have indicated that approximately 12,000,000 units of ore appear to be in the mine. Aristotle incurred$170,000 of development costs associated with this mine prior to any extraction of minerals. It also determined that the fair value of its obligation to prepare the land for an alternative use when all of the mineral has been removed was $40,000. During 2017, 2,500,000 units of ore were extracted and 2,100,000 of these units were sold.InstructionsCompute the following.(a) The total amount of depletion for 2017.(b) The amount that is charged as an expense for 2017 for the cost of the minerals sold during 2017.
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At the beginning of January 2018, Rock Limited acquired a mine for sh34,000,000. Of this amount, sh. 4,000,000 was ascribed to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists have indicated that approximately 480,000,000 units of a precious ore appear to be in the mine. Rock incurred sh. 5,000,000 of development costs associated with this mine prior to any extraction of minerals and estimates that it will require sh. 1,600,000 to prepare the land for an alternative use when all the ore has been removed. During 2018, 40,000,000 units of ore were extracted and 16,000,000 of these units were sold. Compute the total amount of depletion and the cost of the minerals sold in 2018.
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Q2) B. At the beginning of 2019, Minx Company acquired a mine for $950,000. Of this amount, $70,000 was approved to the land value and the remaining portion to the minerals in the mine. Surveys conducted by experts have indicated that approximately 10,000,000 units of the mineral appear to be in the mine. Minx incurred $200,000 of development costs related with this mine prior to any mining of minerals. It also determined that the fair value of its obligation to prepare the land for an alternative use when all of the mineral has been removed was $50,000. During 2019, 2,600,000 units of mineral were mined and 2,300,000 of these units were sold. Instructions Compute the following. The total amount of Mineral depletion for 2019. The amount that is charged as an expense for 2019 for the cost of the minerals sold during 2019.
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Show the solution in good accounting form
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