Northgate Coal Mining uses the units-of-production method of depreciation. A piece of heavyequipment costing $368,000 produces an estimated 1,740,000 units in its life and has anestimated scrap value of $20,000. It produced 316,000 units in the first year.Refer to Northgate Coal Mining. Compute the depreciation for the first year.O S62,200.00$63,200.00O S66,832.18O S66,823.18

The correct option is Option “B”

Answered: Northgate Coal Mining uses the…

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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Use the following information for the Quick Studies below. (Algo) Skip to question [The following information applies to the questions displayed below.]Equipment costing $60,000 with a 4-year useful life and an estimated $10,000 salvage value is acquired and started operating on January 1. The equipment is estimated to produce 5,000 units of product during its life. It produced 750 units in the first year. QS 8-8 (Algo) Recording depreciation journal entries LO P1 Record the journal entries for equipment depreciation for the first year under straight-line, units-of-production, and double-declining-balance.
The Likert Company is a coal company based in West Virginia. The company recently purchased a new coal truck for $120,000. The truck had an expected useful life of 200,000 miles and an expected salvage value of $4,000. Calculate the depreciation expense using the units-of-production method assuming the truck travelled 30,000 miles on company business during the year.
Pharoah Company purchased for $4,543,000 a mine that is estimated to have 45,430,000 tons of ore and no salvage value. In the first year, 14,040,000 tons of ore are extracted. (a1) Calculate depletion cost per unit. (Round answer to 2 decimal places, e.g. 0.50.) Depletion cost per unit $ per ton Save for Later (a2) The parts of this question must be completed in order. This part will be available when you complete the part above.
12. On July 23 of the current year, Dakota Mining Company pays $7,398,720 for land estimated to contain 8,808,000 tons of recoverable ore. It installs and pays for machinery costing $968,880 on July 25. The company removes and sells 451,000 tons of ore during its first five months of operations ending on December 31. Depreciation of the machinery is in proportion to the mine's depletion as the machinery will be abandoned after the ore is mined. Required:Prepare entries to record the following.(a) The purchase of the land.(b) The cost and installation of machinery.(c) The first five months' depletion assuming the land has a net salvage value of zero after the ore is mined.(d) The first five months' depreciation on the machinery.
Last Chance Mine (LCM) purchased a coal deposit for $1,654,350. It estimated it would extract 13,450 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.35 million, $6.25 million, and $5.2 million for years 1 through 3, respectively. During years 1–3, LCM reported net income (loss) from the coal deposit activity in the amount of ($16,400), $705,000, and $577,500, respectively. In years 1–3, LCM extracted 14,450 tons of coal as follows: (1) Tons of Coal (2) Basis Depletion (2)/(1) Rate Tons Extracted per Year Year 1 Year 2 Year 3 13,450 $1,654,350 $123.00 2,550 7,450 4,450 b. What is LCM's percentage depletion for each year (the applicable percentage for coal is 10 percent)?
None
Monty Corp. purchased for $5,977,200 a mine that is estimated to have 49,810,000 tons of ore and no salvage value. In the first year, 12,090,000 tons of ore are extracted. (a1) × Your answer is incorrect. Calculate depletion cost per unit. (Round answer to 2 decimal places, e.g. 0.50.) Depletion cost per unit $ eTextbook and Media 0.22 per ton
Last Chance Mine (LCM) purchased a coal deposit for $2,282,400. It estimated it would extract 15,850 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.21 million, $51 million, and $4.3 million for years 1 through 3, respectively. During years 1–3, LCM reported net income (loss) from the coal deposit activity in the amount of ($16,500), $730,000, and $527,500, respectively. In years 1–3, LCM extracted 16,850 tons of coal as follows: (Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars.) (1) Tons of Coal Year 1 (2) Basis Depletion (2)/(1) Tons Extracted per Rate Year 3 Year Year 2 15,850 $2,282,400 $144.00 4,150 7,300 5,400 c. Using the cost and percentage depletion computations from parts (a) and (b), what is LCM's actual depletion expense for each year?
Colorado Mining paid $564.000 to acquire a mine with 47,000 tons of coal reserves. The financial statements model shown on the last tab reflects Colorado Mining's financial condition just prior to purchasing the coal reserves. The company extracted 24,675 tons of coal in year Land 21150 tons in year 2. Required a Compute the depletion charge per unit b-1. Compute the depletion expense for years 1 and 2 in a financial statements. b-2. Record the acquisition of the coalreserves and the depletion expense for years Fand 2 in a financial statements model. Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Compute the depletion charge per unit. Deple charge per unit per ton Reg BTX
A machine with a cost of $76,828.00 has an estimated residual value of $5,216.00 and an estimated life of 3 years or 14,766 hours. It is to be depreciated by the units-of-production method. What is the amount of depreciation for the second full year, during which the machine was used 4,158 hours? Select the correct answer. $21,634.22 $47,741.33 $23,870.67 $20,165.43

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