Jubilant Company acquired a tract of land containing an extractable natural resource. The entity isrequired by the purchase contract to restore the land to a condition suitable for recreational use afterit had extracted the natural resource. Geological survey indicated that the recoverable reserves willbe 2,500,000 tons and that the extraction will be completed in five years.LandExploration and developmental costExpected cash flow for restoration costCredit adjusted risk free interest ratePV of 1 at 10% for 5 periods9 000 0001 000 0001 500 00010%0.62

Provisions for Decommissioning = future cost of restoration x PVF@ 10%,5 years Depletion charge per…

Answered: Jubilant Company acquired a tract of…

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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Natural Resources The Hollister Company acquires a silver mine at the cost of $2,100,000 on January 1. Along with the purchase price Hollister pays additional costs associated with development of $50,000, Hollister expects the mine will have a salvage value of $300,000 once all the silver has been mined. Best estimates are that the mine contains 250,000 tons of ore. Required a: Prepare the entry to record the purchase of the silver mine. b. Prepare the December 31 year-end adjusting entry to record depletion is 60,000 tons of ore are mined and all the ore is sold, c. Prepare the December 31 year-end adjusting entry to record depletion is 60,000 tons of ore are mined but only 15,000 tons of the are are sold Description Credit 4 # Purchase of silver mine # = To record depletion on silver mine Siver inventory To record depletion on silver mine Debit
help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working
Electric generating and transmission equigment is placed in service at a cost of $3,250,000. It is expected to last 30 years with a salvage value of $250,000. Click here to access the MACRS-GDS Property Classes Part a Your answer is correct What is the MACRS-GDS property class? 20-Year Property Attempts: 1 of 3 used Part b Determine the depreciation deduction and the unrecovered investment during each of the first 4 tax years. Unrecovered Investment EOY Depreciation Deduction %24 2 3 4. Carry all Interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is 100. %24
Problem J: On January 1, 2021, the Reddick Company purchased a mining right for P30,000,000. The mine's recoverable ore reserves are estimated to be 4,000,000 tons. Following the extraction of all ore, the company will be obligated by law to return the land to its original state. The present value of the restoration cost is P2,000,000. The company estimated that the property may be sold for P5,000,000. At a cost of P6,000,000, roads were built and other development costs were invested to aid in the extraction and transportation of the mined ore in early 2021. 200,000 tons of ore were extracted and sold in 2021. A new study conducted by a new mining engineer on December 31, 2022, revealed that 5,000,000 tons of ore were available for mining. 225,000 tons of ore were mined and sold in 2022. How much depletion expense should be recognized in 2022?
7. Required information [The following information applies to the questions displayed below.]Falcon Crest Aces (FCA), Inc., is considering the purchase of a small plane to use in its wing-walking demonstrations and aerial tour business. Various information about the proposed investment follows: Initial investment $170,000 Useful life 10 years Salvage value $20,000 Annual net income generated $4,000 FCA's cost of capital 8% Assume straight line depreciation method is used. Help FCA evaluate this project by calculating each of the following: Net present value (NPV). (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round the final answer to nearest whole dollar.) Net Present Value = ? (Tables are attached here as images)
As part of the initial investment, Ray Blake contributes equipment that had originally cost $87,200 and on which accumulated depreciation of $65,400 has been recorded. If similar equipment would cost $166,900 to replace and the partners agree on a valuation of $52,000 for the contributed equipment, what amount should be debited to the equipment account? a.$52,000 b.$39,000 c.$166,900 d.$87,200
Required information [The following information applies to the questions displayed below.] Montego Production Company is considering an investment in new machinery for its factory. Various information about the proposed investment follows: Initial investment Useful life Salvage value Annual net income generated Montego's cost of capital Assume straight line depreciation method is used. Help Montego evaluate this project by calculating each of the following: $ 860,000 6 years Net Present Value $ 20,000 $ 66,000 11% Required: 4. Recalculate Montego's NPV assuming its cost of capital is 12 percent. (Future Value of $1, Present Value of $1. Future Value Annuity of $1, Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.
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The amount of the average investment for a proposed investment of $158,000 in a fixed asset with a useful life of 4 years, straight-line depreciation, no residual value, and an expected total income of $23,700 for the 4 years is a.$23,700 b.$39,500 c.$79,000 d.$5,925

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