Oriole Company purchased land on February 1, 2020, at a cost of $2,102,000. It estimated that a total of 53,000 tons of mineral wasavailable for mining. After it has removed all the natural resources, the company will be required to restore the property to its previousstate because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $191,000. It believesit will be able to sell the property afterwards for $274,000. It incurred developmental costs of $525,000 before it was able to do anymining. In 2020, resources removed totaled 10,600 tons. The company sold 5,300 tons.Compute the following information for 2020.(a)Per unit mineral cost$/ton(b)Total material cost of December 31, 2020, inventory$+A(c)Total material cost in cost of goods sold at December 31, 2020$

Detailed calculation and explanation:Cost to purchase land -------2,102,000Less residual value…

Answered: Oriole Company purchased land on…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 13P

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Tree Lovers Inc. purchased 2,500 acres of woodland in which it intends to harvest the complete forest, leaving the land barren and worthless. Tree Lovers paid $5,000,000 for the land. Tree Lovers will sell the lumber as it is harvested and it expects to deplete it over ten years (150 acres in year one, 300 acres in year two, 250 acres in year three, 150 acres in year four, and 100 acres in year five). Calculate the depletion expense for the next five years and create the journal entry for year one.
At the end of 2020, Magenta Manufacturing Company discovered that construction cost had been capitalized as a cost of the factory building in 2015 when it should have been treated as a cost of production equipment installation costs. As a result of the misclassification, the depreciation through 2018 was understated by 110,000, and depreciation for 2019 was understated by 90,000. What would be the consequences of correcting for the misclassification of the property cost? a. The taxpayer uses the FIFO inventory method, and 25% of goods produced during the period were included in the ending inventory. b. The taxpayer uses the LIFO inventory method, and no new LIFO layer was added during 2019.
Alcide Mining Company purchased land on February 1, 2020, at a cost of $1,190,000. It estimated that a total of 60,000 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $90,000. It believes it will be able to sell the property afterwards for $100,000. It incurred developmental costs of $200,000 before it was able to do any mining. In 2020, resources removed totaled 30,000 tons. The company sold 22,000 tons. Instructions Compute the following information for 2020. a. Per unit material cost. b. Total material cost of December 31, 2020, inventory. c. Total material cost in cost of goods sold at December 31, 2020.
Tamarisk Mining Company purchased land on February 1, 2020, at a cost of $ 914,300. It estimated that a total of 53,400 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $ 98,100. It believes it will be able to sell the property afterwards for $ 109,000. It incurred developmental costs of $ 218,000 before it was able to do any mining. In 2020, resources removed totaled 26,700 tons. The company sold 19,580 tons. Compute the following information for 2020. a) Per unit mineral cost $ (b) Total material cost of December 31, 2020, inventory $ (c) Total material cost in cost of goods sold at December 31, 2020 $
Tamarisk Mining Company purchased land on February 1, 2020, at a cost of $945,100. It estimated that a total of 55,500 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $104,400. It believes it will be able to sell the property afterwards for $116,000. It incurred developmental costs of $232,000 before it was able to do any mining. In 2020, resources removed totaled 27,750 tons. The company sold 20,350 tons. Compute the following information for 2020. (a) Per unit mineral cost $enter a dollar amount (b) Total material cost of December 31, 2020, inventory $enter a dollar amount (c) Total material cost in cost of goods sold at December 31, 2020 $enter a dollar amount
Headland Mining Company purchased land on February 1, 2020, at a cost of $939,500. It estimated that a total of 51,600 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $92,700. It believes it will be able to sell the property afterwards for $103,000. It incurred developmental costs of $206,000 before it was able to do any mining. In 2020, resources removed totaled 25,800 tons. The company sold 18,920 tons. Compute the following information for 2020. (a) Per unit mineral cost (b) Total material cost of December 31, 2020, inventory $4 (c) Total material cost in cost of goods sold at December 31, 2020 24
Nash Mining Company purchased land on February 1, 2020, at a cost of $ 914,300. It estimated that a total of 53,400 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $ 98,100. It believes it will be able to sell the property afterwards for $ 109,000. It incurred developmental costs of $ 218,000 before it was able to do any mining. In 2020, resources removed totaled 26,700 tons. The company sold 19,580 tons.Compute the following information for 2020. (a) Per unit mineral cost $ (b) Total material cost of December 31, 2020, inventory $ (c) Total material cost in cost of goods sold at December 31, 2020 $
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Bonita Mining Company purchased land on February 1, 2025, at a cost of $1,252,100. It estimated that a total of 57,000 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $108,900. It believes it will be able to sell the property afterwards for $121,000. It incurred developmental costs of $242,000 before it was able to do any mining. In 2025, resources removed totaled 28,500 tons. The company sold 20,900 tons. Compute the following information for 2025. a. b. C. Per unit mineral cost Total material cost of December 31, 2025, inventory Total material cost in cost of goods sold at December 31, 2025 $ $ /ton
Dinesh
Larkspur Mining Company purchased land on February 1, 2025, at a cost of $1,031,100. It estimated that a total of 54,000 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $99,900. It believes it will be able to sell the property afterwards for $111,000. It incurred developmental costs of $222,000 before it was able to do any mining. In 2025, resources removed totaled 27,000 tons. The company sold 19,800 tons. Compute the following information for 2025. a. Per unit mineral cost $ b. Total material cost of December 31, 2025, inventory $ C. Total material cost in cost of goods sold at December 31, 2025 $ /ton
Vaughn Mining Company purchased land on February 1, 2025, at a cost of $1,031,100. It estimated that a total of 54,000 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $99,900. It believes it will be able to sell the property afterwards for $111,000. It incurred developmental costs of $222,000 before it was able to do any mining. In 2025, resources removed totaled 27,000 tons. The company sold 19,800 tons. Compute the following information for 2025. a. Per unit mineral cost $enter a dollar amount per ton /ton b. Total material cost of December 31, 2025, inventory $enter a dollar amount c. Total material cost in cost of goods sold at December 31, 2025 $enter a dollar amount

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