Required information [The following information applies to the questions displayed below] Last Chance Mine (LCM) purchased a coal deposit for $750,000. It estimated it would extract 12.000 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1 million, $3 million, and $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 ($20,000) $500,000, and $450,000, respectively. In years 1-3, LCM actually extracted 13,000 tons of coal as follows: (Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars.) Year 1 2 3 (3) Tons of Coal 12,000 (2) Basis $750,000 Depletion (2)/(1) Rate $62.50 b. What is LCM's percentage depletion for each year (the applicable percentage for coal is 10 percent? Percentage Depletion Tons Extracted per Year Year 11 Year 2 2,000 7,200 Year 3 3,000

Required information [The following information applies to the questions displayed below] Last Chance Mine (LCM) purchased a coal deposit for $750,000. It estimated it would extract 12.000 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1 million, $3 million, and $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 ($20,000) $500,000, and $450,000, respectively. In years 1-3, LCM actually extracted 13,000 tons of coal as follows: (Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars.) Year 1 2 3 (3) Tons of Coal 12,000 (2) Basis $750,000 Depletion (2)/(1) Rate $62.50 b. What is LCM's percentage depletion for each year (the applicable percentage for coal is 10 percent? Percentage Depletion Tons Extracted per Year Year 11 Year 2 2,000 7,200 Year 3 3,000

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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Solare Company acquired mineral rights for $287,200,000. The diamond deposit is estimated at 35,900,000 tons. During the current year, 3,660,000 tons were mined and sold. a. Determine the depletion rate.$fill in the blank 5df5b004305d067_1 per ton b. Determine the amount of depletion expense for the current year.$fill in the blank 5df5b004305d067_2 c. Journalize the adjusting entry to recognize the depletion expense. If an amount box does not require an entry, leave it blank. Dec. 31 fill in the blank 0ae001fa5fd7fc8_2 fill in the blank 0ae001fa5fd7fc8_3 fill in the blank 0ae001fa5fd7fc8_5 fill in the blank 0ae001fa5fd7fc8_6
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Required information [The following information applies to the questions displayed below.] Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $830,000. The estimated market values of the purchased assets are building, $467,500; land, $243,100; land improvements, $56,100; and four vehicles, $168,300. 4. Compared to straight-line depreciation, does accelerated depreciation result in payment of less total taxes over the asset's life? Is tax payment less under accelerated depreciation?
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Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows: a. On December 31, the company determined that $750,000 of goodwill was impaired. b. Governmental and legal costs of $1,920,000 were incurred on September 30 in obtaining a patent with an estimated economic life of 12 years. Amortization is to be for one-fourth of a year. c. Timber rights on a tract of land were purchased for $320,000 on February 4. The stand of timber is estimated at 2,000,000 board feet. During the current year, 500,000 board feet of timber were cut and sold. Required: 1. Determine the amount of the amortization, depletion, or impairment for the current year for each of the foregoing items. Do not round your intermediate calculation. Item Impairment, Amortization or Depletion Expense a. b. C. 2. Journalize the adjusting entries to record the amortization, depletion, or impairment for each item. If an amount box does not…
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