On July 1, 2020, Sunland Company invested $624,890 in a mine estimated to have 791,000 tons of ore of uniform grade. During the last 6 months of 2020, 125,000 tons of ore were mined. Calculate depletion cost per unit. (Round answer to 2 decimal places, e.g. 0.50.) Depletion cost per unit $ ? PART 2: Prepare the journal entry to record depletion. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31 enter an account title for the journal entry on December 31 enter a debit amount enter a credit amount enter an account title for the journal entry on December 31 enter a debit amount enter a credit amount PART 3: Assume that the 125,000 tons of ore were mined, but only 76,000 units were sold. Indicate how are the costs applicable to the 49,000 unsold units reported? The costs pertaining to the unsold units are reported in [select an item] as part of [select an item] at $ [enter a dollar amount] 1. current assests, current liabilities, or investments 2. Accounts payable, short term investments, or inventoru 3. dollar amount
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
| Depletion cost per unit | $ ? |
PART 2: Prepare the
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
Dec. 31 |
enter an account title for the journal entry on December 31 |
enter a debit amount |
enter a credit amount |
|
enter an account title for the journal entry on December 31 |
enter a debit amount |
enter a credit amount |
PART 3: Assume that the 125,000 tons of ore were mined, but only 76,000 units were sold. Indicate how are the costs applicable to the 49,000 unsold units reported?
|
The costs pertaining to the unsold units are reported in [select an item] as part of [select an item] at $ [enter a dollar amount] 1. current assests, current liabilities, or investments 2. Accounts payable, short term investments, or inventoru 3. dollar amount |
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