Exercise 8-19A (Static) Computing and recording depletion expense Colorado Mining paid $600.000 to acquire a mine with 40.000 tons of coal reserves. The financial statements model in Required B reflects Colorado Mining's financial condition just prior to purchasing the coal reserves. The company extracted 15.000 tons of coal in year 1 and 18.000 tons in year 2 Required: a Compute the depletion charge per ton b. 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. Required Compute the depletion charge per ton Depon

Exercise 8-19A (Static) Computing and recording depletion expense Colorado Mining paid $600.000 to acquire a mine with 40.000 tons of coal reserves. The financial statements model in Required B reflects Colorado Mining's financial condition just prior to purchasing the coal reserves. The company extracted 15.000 tons of coal in year 1 and 18.000 tons in year 2 Required: a Compute the depletion charge per ton b. 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. Required Compute the depletion charge per ton Depon

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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Comparing Three Depreciation Methods Waylander Coatings Company purchased waterproofing equipment on January 6 for $248,600. The equipment was expected to have a useful life of four years, or 7,600 operating hours, and a residual value of $20,600. The equipment was used for 2,900 hours during Year 1, 2,400 hours in Year 2, 1,400 hours in Year 3, and 900 hours in Year 4. Required: 1. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-output method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the four years by each method.Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar. Depreciation Expense Year Straight-Line Method Units-of-Output Method Double-Declining-Balance Method Year 1 $fill in the blank 1 $fill in the blank 2 $fill…
Comparing three depreciation methods Dexter Industries purchased packaging equipment on January 8 for $86,400. The equipment was expected to have a useful life of three years, or 21,600 operating hours, and a residual value of $5,400. The equipment was used for 8,640 hours during Year 1, 6,480 hours in Year 2, and 6,480 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ending December 31, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the three years by each method. Round the final answers for each year to the nearest whole dollar. Depreciation Expense Year Straight-Line Method Units-of-Activity Method Double-Declining-Balance Method Year 1 $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Year 2 $fill in the blank 4 $fill in the blank 5 $fill in the blank 6 Year 3 $fill in the…
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Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $72,000. The equipment was expected to have a useful life of three years, or 18,000 operating hours, and a residual value of $4,500. The equipment was used for 7,600 hours during Year 1, 6,000 hours in Year 2, and 4,400 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2 and Year 3 by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the three years by each method. Round the answer for each year to the nearest whole dollar. Depreciation Expense Year Straight-Line Method Units-of-Activity Method Double-Declining-Balance Method Year 1 Year 2 Year 3 Total 2. What method yields the highest depreciation expense for Year 1? 3. What method yields the most depreciation over the three-year life of the equipment?
Calculating Depletion, Depreciation, and Ending Inventory Aerial Company acquired land containing natural resources on January 1 that it planned to extract for $6 million. The amount allocated to the land is $220,000. Surveys estimate that the recoverable resources will total 4 million tons. The company paid an additional $440,000 for development of the mining land to prepare for the extraction of the resources. The company also incurred $220,000 to install mining equipment with a useful life of 8 years. The equipment will not be used for other projects. The company is obligated to restore the site after the extraction of resources. The present value of this obligation is $55,000. The company extracted 528,000 tons of natural resources during the year and 495,000 tons were sold during the year. Required a. Determine depletion for the natural resource during the year. Hint: Equipment cost is accounted for separately and its depreciation is recorded as Depreciation Expense. Numerator /…
Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $725,600. The equipment was expected to have a useful life of four years, or 10,400 operating hours, and a residual value of $60,000. The equipment was used for 3,640 hours during Year 1, 2,184 hours in Year 2, 2,912 hours in Year 3, and 1,664 hours in Year 4. Required: 1. Determine the amount of depreciation expense for the four years ending December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the four years by each method. Round the answer for each year to the nearest whole dollar. Depreciation Expense Year Straight-Line Method Units-of-Activity Method Double-Declining-Balance Method Year 1 $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Year 2 $fill in the blank 4 $fill in the blank 5 $fill in the blank 6 Year 3 $fill in…
Comparing Three Depreciation Methods Waylander Coatings Company purchased waterproofing equipment on January 6 for $730,400. The equipment was expected to have a useful life of four years, or 10,000 operating hours, and a residual value of $60,400. The equipment was used for 3,800 hours during Year 1, 3,100 hours in Year 2, 1,800 hours in Year 3, and 1,300 hours in Year 4. Required: 1. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-output method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the four years by each method.Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar. Depreciation Expense Year Straight-Line Method Units-of-Output Method Double-Declining-Balance Method Year 1 $fill in the blank 1 $fill in the blank 2…
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Exercise 14-43 (Algo) Impact of an Asset Disposal on Performance Measures (LO 14-2, 3) Veach Division has total assets (net of accumulated depreciation) of $462,000 at the beginning of year 1. One of the assets is a machine that has a net book value of $43,260. Expected divisional income in year 1 is $55,440 including $2,940 in income generated by the machine (after depreciation). Veach's cost of capital is 10 percent. Veach is considering disposing of the asset today (the beginning of year 1). Required: a. Veach computes ROI using beginning-of-the-year net assets. What will the divisional ROI be for year 1 assuming Veach retains the asset? b. What would divisional ROI be for year 1 assuming Veach disposes of the asset for its book value and there is no gain or loss on the sale? Note: Enter your answer as a percentage rounded to 1 decimal place (i.e., 32.1). c. Veach computes residual income using beginning-of-the-year net assets. What will the divisional residual income be for year 1…
Comparing three depreciation methods Dexter Industries purchased packaging equipment on January 8 for $90,000. The equipment was expected to have a useful life of 3 years, or 18,000 operating hours, and a residual value of $4,500. The equipment was used for 7,200 hours during Year 1, 5,400 hours in Year 2, and 5,400 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the 3 years ending December 31, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the 3 years by each method. Do not round intermediate calculations when determining the depreciation rate. Round the final answers for each year to the nearest whole dollar. Year Year 1 Year 2 Year 3 Total Straight-Line Method Depreciation Expense Units-of-Activity Method 2. What method yields the highest depreciation expense for Year 1? Double-Declining- Balance Method 3. What method yields the most…