UNESCO Mining Co. acquired mineral rights for $55,500,000. The mineral deposit is estimated at 37,000,000 tons. During the current year, 6,000,000 tons were mined and sold. Determine the amount of depletion expense for the current year. Give solution to this accounting problem

UNESCO Mining Co. acquired mineral rights for $55,500,000. The mineral deposit is estimated at 37,000,000 tons. During the current year, 6,000,000 tons were mined and sold. Determine the amount of depletion expense for the current year. Give solution to this accounting problem

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 56P

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UNESCO Mining Co. acquired mineral rights for $55,500,000. The mineral deposit is estimated at 37,000,000 tons. During the current year, 6,000,000 tons were mined and sold. Determine the amount of depletion expense for the current year. Give solution
UNESCO Mining Co. acquired mineral rights for $55,500,000. The mineral deposit is estimated at 37,000,000 tons. During the current year, 6,000,000 tons were mined and sold. Determine the amount of depletion expense for the current year.
Earth's Treasures Mining Co. acquired mineral rights for $37,500,000. The mineral deposit is estimated at 30,000,000 tons. During the current year, 9,300,000 tons were mined and sold. Question Content Area a. Determine the depletion rate. If required, round your answer to two decimal places.fill in the blank 1 of 1$ per ton b. Determine the amount of depletion expense for the current year.fill in the blank 1 of 1$ Feedback Area Feedback Question Content Area c. Journalize the adjusting entry on December 31 to recognize the depletion expense. If an amount box does not require an entry, leave it blank. Date Account Debit Credit December 31
On April 17 of the current year, a mining company purchased the rights to a mine. The purchase price plus additional costs necessary to prepare the mine for extraction of minerals totaled $6,300,000. The company expects to extract 1,050,000 tons of minerals during a four-year period. During the current year, 255,000 tons were extracted and sold immediately. Required: 1. Calculate depletion for the current year. 2. Is depletion considered part of the product cost and included in the cost of inventory? 1. Depletion for the current year 2. Is depletion considered part of the product cost and included in the cost of inventory?
Montana Mining Company pays $4,360,440 for an ore deposit containing 1,552,000 tons. The company installs machinery in the mine costing $245,300. Both the ore and machinery will have no salvage value after the ore is completely mined. Montana mines and sells 177,800 tons of ore during the year. Prepare the December 31 year-end entries to record both the ore machinery depreciation should be in proportion to the mine's depletion depletion and the mining machinery depreciation. Mining Note: Do not round intermediate calculations. Round your final answers to the nearest whole number. View transaction list Journal entry worksheet 2 Record the year-end adjusting entry for the depletion expense of ore mine. Note: Enter debits before credits. Date December 31 Record entry General Journal Clear entry Debit Credit View general journal Journal entry worksheet < 1 12 Record the year-end adjusting entry for the depreciation expense of the mining machinery. Note: Enter debits before credits. Date…
Montana Mining Co. pays $3,926,550 for an ore deposit containing 1,572,000 tons. The company installs machinery in the mine costing $152,400, which will be abandoned when the ore is completely mined. Montana mines and sells 145,700 tons of ore during the year. Prepare the year-end entries to record both the ore deposit depletion and the mining machinery depreciation. Mining machinery depreciation should be in proportion to the mine's depletion. (Do not round intermediate calculations. Round your final answers to the nearest whole number.) View transaction list Journal entry worksheet es Record the year-end adjusting entry for the depletion expense of ore mine. Note: Enter debits before credits. Date General Journal Debit Credit Dec 31 Vlew general Journal Record entry Clear entry < Prev 7 of 7 Next aw MacBook Air
Miller Mining acquired rights to a tract of land with the intent of extracting from the land a valu-able mineral. The cost of the rights was $2,500,000 and an estimated 10,000 tons of the mineral are expected to be extracted. Assuming that 1,600 tons of the mineral are actually extracted in the firstyear, determine the amount of depletion expense that should be recognized for that year.
Salter Mining Company purchased the Northern Tier Mine for $21 million cash. The mine was estimated to contain 2.5 million tons of ore and to have a residual value of $1 million. During the first year of mining operations at the Northern Tier Mine, 50,000 tons of ore were mined, of which 40,000 tons were sold. a. Prepare a journal entry to record depletion during the year. b. Show how the Northern Tier Mine, and its accumulated depletion, would appear in Salter Mining Company's balance sheet after the first year of operations. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Show how the Northern Tier Mine, and its accumulated depletion, would appear in Salter Mining Company's balance sheet after the first year of operations. (Amounts to be deducted should be indicated by a minus sign) Property, plant, & equipment Accumulated depletion Mining property: Northern Tier Mine Salter Mining Company Balance…
Last Chance Mine (LCM) purchased a coal deposit for $1,654,350. It estimated it would extract 13,450 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.35 million, $6.25 million, and $5.2 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 ($16,400), $705,000, and $577,500, respectively. In years 1–3, LCM extracted 14,450 tons of coal as follows: (1) Tons of Coal (2) Basis Depletion (2)/(1) Rate Tons Extracted per Year Year 1 Year 2 Year 3 13,450 $1,654,350 $123.00 2,550 7,450 4,450 c. Using the cost and percentage depletion computations from parts (a) and (b), what is LCM's actual depletion expense for each year?
Last Chance Mine (LCM) purchased a coal deposit for $1,654,350. It estimated it would extract 13,450 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.35 million, $6.25 million, and $5.2 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 ($16,400), $705,000, and $577,500, respectively. In years 1–3, LCM extracted 14,450 tons of coal as follows: (1) Tons of Coal (2) Basis Depletion (2)/(1) Rate Tons Extracted per Year Year 1 Year 2 Year 3 13,450 $1,654,350 $123.00 2,550 7,450 4,450 b. What is LCM's percentage depletion for each year (the applicable percentage for coal is 10 percent)?
Weber Company purchased a mining site for $690,727 on July 1. The company expects to mine ore for the next 10 years and anticipates that a total of 86,719 tons will be recovered. The estimated residual value of the property is $40,504. During the first year, the company extracted 5,948 tons of ore. The depletion expense is a.$65,022.30 b.$44,598.37 c.$47,376.52 d.$40,504.00
Weber Company purchased a mining site for $525,247 on July 1. The company expects to mine ore for the next 10 years and anticipates that a total of 85,242 tons will be recovered. The estimated residual value of the property is $49,377. During the first year, the company extracted 4,550 tons of ore. The depletion expense is Oa. $47,587.00 Ob. $25,400.72 Oc. $28,036.34 Od. $49,377.00