On January 2, 2019, Whistler Company purchased land for $490,000, from which it is estimated that 420,000 tons of ore could be extracted. It estimates that the present value of the cost necessary to restore the land is $55,000, after which it could be sold for $33,000.During 2019, Whistler mined 73,000 tons and sold 55,000 tons. During 2020, Whistler mined 96,000 tons and sold 91,000 tons. At the beginning of 2021, Whistler spent an additional $90,000, which increased the reserves by 64,000 tons. In 2021, Whistler mined 145,000 tons and sold 145,000 tons. Whistler uses a FIFO cost flow assumption.Required:If required, round the depletion rate to the nearest cent and round the final answers to the nearest dollar.1. Calculate the depletion included in the income statement and ending inventory for 2019, 2020, and 2021.2019Depletion deducted from income$fill in the blank Depletion included in inventory$fill in the blank 2020Depletion deducted from income$fill in the blank Depletion included in inventory$fill in the blank 2021Depletion deducted from income$fill in the blank Depletion included in inventory$fill in the blank 2. Complete the natural resources section of the balance sheet on December 31, 2019, 2020, and 2021, assuming that an accumulated depletion account is used. Whistler CompanyBalance Sheet (partial)December 31, 2019 - 2021December 31, 2019 Mineral ore resources$fill in the blank Less: Accumulated depletionfill in the blank $fill in the blank (Total) December 31, 2020 Mineral ore resources$fill in the blank Less: Accumulated depletionfill in the blank $fill in the blank (total) December 31, 2021 Mineral ore resources$fill in the blank Less: Accumulated depletionfill in the blank $fill in the blank (total) 3. Assume Whistler's discount rate was 10%. What is the balance in the asset retirement obligation at 2019, 2020, and 2021?Whistler CompanyAsset retirement obligation2019 - 2021December 31, 2019$________December 31, 2020$________December 31, 2021$________

2019 unit depletion rate = [490,000 + 55,000 - 33,000 ] / 420,000 = 1.22 per ton 2021 unit depletion…

Answered: On January 2, 2019, Whistler Company…

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, 2019, Whistler Company purchased land for $490,000, from which it is estimated that 420,000 tons of ore could be extracted. It estimates that the present value of the cost necessary to restore the land is $55,000, after which it could be sold for $33,000.

During 2019, Whistler mined 73,000 tons and sold 55,000 tons. During 2020, Whistler mined 96,000 tons and sold 91,000 tons. At the beginning of 2021, Whistler spent an additional $90,000, which increased the reserves by 64,000 tons. In 2021, Whistler mined 145,000 tons and sold 145,000 tons. Whistler uses a FIFO cost flow assumption.

Required:

If required, round the depletion rate to the nearest cent and round the final answers to the nearest dollar.

1. Calculate the depletion included in the income statement and ending inventory for 2019, 2020, and 2021.

2019	Depletion deducted from income	$fill in the blank
	Depletion included in inventory	$fill in the blank
2020	Depletion deducted from income	$fill in the blank
	Depletion included in inventory	$fill in the blank
2021	Depletion deducted from income	$fill in the blank
	Depletion included in inventory	$fill in the blank

2. Complete the natural resources section of the balance sheet on December 31, 2019, 2020, and 2021, assuming that an accumulated depletion account is used.

Whistler CompanyBalance Sheet (partial)

December 31, 2019 - 2021

December 31, 2019

Mineral ore resources	$fill in the blank
Less: Accumulated depletion	fill in the blank
		$fill in the blank (Total)

December 31, 2020

Mineral ore resources	$fill in the blank
Less: Accumulated depletion	fill in the blank
		$fill in the blank (total)

December 31, 2021

Mineral ore resources	$fill in the blank
Less: Accumulated depletion	fill in the blank
		$fill in the blank (total)

3. Assume Whistler's discount rate was 10%. What is the balance in the asset retirement obligation at 2019, 2020, and 2021?

Whistler CompanyAsset retirement obligation2019 - 2021

December 31, 2019	$________
December 31, 2020	$________
December 31, 2021	$________

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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