Answered: On January 2, 2018, ABC Company… | bartleby

On January 2, 2018, ABC Company purchased land for ₱450,000, from which it estimated that 400,000 tons of ore could be extracted. It estimates that it will cost ₱80,000 to restore the land after which it could be sold for ₱30,000. During 2018, the company mined 80,000 tons and sold 50,000 tons. During 2019, the company mined 100,000 tons and sold 120,000 tons. At the beginning of 2020, the company spent an additional ₱100,000, which increased the reserves by 60,000 tons. In 2020, the company mined 140,000 tons and sold 130,000 tons. The company uses a FIFO cost flow assumption. Depletion for 2019_______

FINANCIAL ACCOUNTING

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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On January 2, 2018, ABC Company purchased land for ₱450,000, from which it estimated that 400,000 tons of ore could be extracted. It estimates that it will cost ₱80,000 to restore the land after which it could be sold for ₱30,000. During 2018, the company mined 80,000 tons and sold 50,000 tons. During 2019, the company mined 100,000 tons and sold 120,000 tons. At the beginning of 2020, the company spent an additional ₱100,000, which increased the reserves by 60,000 tons. In 2020, the company mined 140,000 tons and sold 130,000 tons. The company uses a FIFO cost flow assumption. Depletion for 2019_______

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In 2021, the Marion Company purchased land containing a mineral mine for $1,800,000. Additional costs of $920,000 were incurred to develop the mine. Geologists estimated that 400,000 tons of ore would be extracted. After the ore is removed, the land will have a resale value of $120,000. To aid in the extraction, Marion built various structures and small storage buildings on the site at a cost of $208,000. These structures have a useful life of 10 years. The structures cannot be moved after the ore has been removed and will be left at the site. In addition, new equipment costing $109,000 was purchased and installed at the site. Marion does not plan to move the equipment to another site, but estimates that it can be sold at auction for $5,000 after the mining project is completed. In 2021, 70,000 tons of ore were extracted and sold. In 2022, the estimate of total tons of ore in the mine was revised from 400,000 to 499,000. During 2022, 109,000 tons were extracted. Required: 1. Compute…
In 2024, the Marion Company purchased land containing a mineral mine for $1,200,000. Additional costs of $452,000 were incurred to develop the mine. Geologists estimated that 320,000 tons of ore would be extracted. After the ore is removed, the land will have a resale value of $100,000. To aid in the extraction, Marion built various structures and small storage buildings on the site at a cost of $107,200. These structures have a useful life of 10 years. The structures cannot be moved after the ore has been removed and will be left at the site. In addition, new equipment costing $55,200 was purchased and installed at the site. Marion does not plan to move the equipment to another site, but estimates that it can be sold at auction for $4,000 after the mining project is completed. In 2024, 42,000 tons of ore were extracted and sold. In 2025, the estimate of total tons of ore in the mine was revised from 320,000 to 407,500. During 2025, 72,000 tons were extracted, of which 52,000 tons were…

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