For this problem I kept getting a few numbers wrong. Please look at picture titled "Accounting Question" for the table I'm suppose to input the answers to. The problem is asing for: 1. Compute depletion and depreciation on the mine and mining equipment for 2021 and 2022. The units-of-production method is used to calculate depreciation. (The expected format for rounding is presented in the appropriate rows of the table. Round your final answers to nearest whole dollar.
For this problem I kept getting a few numbers wrong. Please look at picture titled "Accounting Question" for the table I'm suppose to input the answers to. The problem is asing for: 1. Compute depletion and depreciation on the mine and mining equipment for 2021 and 2022. The units-of-production method is used to calculate depreciation. (The expected format for rounding is presented in the appropriate rows of the table. Round your final answers to nearest whole dollar.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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For this problem I kept getting a few numbers wrong. Please look at picture titled "Accounting Question" for the table I'm suppose to input the answers to.
The problem is asing for:
1. Compute depletion and
Transcribed Image Text:Requlred:
1. Compute depletion and depreclation on the mine and mining equlpment for 2021 and 2022. The units-of-production method Is used
to calculate depreclation. (The expected format for rounding is presented In the approprlate rows of the table. Round your final
answers to nearest whole doller.)
Probable
Restoration costs:
Cash outflow
Probability
Restoration
Cost
Possibility 1
400,000
25%
Possibility 2
500,000
40%
Possibility 3
700,000
35%
Table or Calculator function:
n =
i=
Present value of probable restoration costs
Cost of copper mine:
Mining site
Development cost
Restoration cost
Depletion expense (mine):
2021
2022
Depletion per pound (#.####)
0.0000
Pounds extracted
Depletion expense
Depreciation expense (mining equipment)
2021
022
Depreciation per pound (#.##)
0.00
Pounds extracted
Depreciation expense
![Exercise 11-18 (Algo) Cost of a natural resource; depletion and depreciation; Chapters 10 and 11 [LO11-2,
11-3]
Jackpot Mining Company operates a copper mine in central Montana. The company pald $1,500,000 in 2021 for the mining site and
spent an additional S700,000 to prepare the mine for extraction of the copper. After the copper is extracted in approximately four
years, the company is required to restore the land to Its original condition, Including repaving of roads and replacing a greenbelt. The
company has provided the following three cash flow possibilltles for the restoration costs: (FV of $1. PV of $1, FVA of $1, PVA of $1.
EVAD of $1 and PVAD of $1) (Use approprlate factor(s) from the tebles provided.)
Cash Outflow Probability
$400, 000
500, e00
700, 000
1
25%
2
40%
35%
To ald extraction, Jackpot purchased some new equlpment on July 1, 2021, for $250,000. After the copper Is removed from this mine,
the equipment will be sold for an estimated residual amount of $30,000. There will be no residual value for the copper mine. The
credit-adjusted risk-free rate of Interest Is 10%.
The company expects to extract 11.0 million pounds of copper from the mine. Actual production was 2.6 million pounds in 2021 and 4.0
millon pounds In 2022.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F10b0a167-05b2-4876-8dc8-efca224cb278%2Ff4781e45-6ca6-45e8-830e-8543950f8af9%2Fry3uetl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 11-18 (Algo) Cost of a natural resource; depletion and depreciation; Chapters 10 and 11 [LO11-2,
11-3]
Jackpot Mining Company operates a copper mine in central Montana. The company pald $1,500,000 in 2021 for the mining site and
spent an additional S700,000 to prepare the mine for extraction of the copper. After the copper is extracted in approximately four
years, the company is required to restore the land to Its original condition, Including repaving of roads and replacing a greenbelt. The
company has provided the following three cash flow possibilltles for the restoration costs: (FV of $1. PV of $1, FVA of $1, PVA of $1.
EVAD of $1 and PVAD of $1) (Use approprlate factor(s) from the tebles provided.)
Cash Outflow Probability
$400, 000
500, e00
700, 000
1
25%
2
40%
35%
To ald extraction, Jackpot purchased some new equlpment on July 1, 2021, for $250,000. After the copper Is removed from this mine,
the equipment will be sold for an estimated residual amount of $30,000. There will be no residual value for the copper mine. The
credit-adjusted risk-free rate of Interest Is 10%.
The company expects to extract 11.0 million pounds of copper from the mine. Actual production was 2.6 million pounds in 2021 and 4.0
millon pounds In 2022.
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