Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Chapter 11, Problem 18E
1.
To determine
Calculate the cost of depletion per ton of Company F.
2.
To determine
Calculate the total cost of inventory of Company F for the year ended December 31, 2019.
3.
To determine
Calculate the total cost of goods sold of Company for 2019.
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Feller Company purchased a site for a limestone quarry for $100,000 on January 2, 2019. It estimates that the quarry will yield 400,000 tons of limestone. It estimates that its retirement obligation has a fair value of $20,000, after which the land could be sold for $10,000. In 2019, 80,000 tons were quarried and 60,000 tons sold. Costs of production (excluding depletion) are $4 per ton.
Required:
Compute the depletion cost per ton. Round your answer to three decimal places.
Compute the total cost of the inventory at December 31, 2019.
Compute the total cost of goods sold for 2019.
The Fairy Company purchased a site for limestone quarry for P 100,000 on January 2,2020. It estimates that the quarry will yield 400,000 tons of limestone. It estimates that itsretirement obligation has a fair value of P 20,000 after which the land can be sold for P10,000. In 2020, 80,000 tons were quarried and 60,000 tons sold. Cost of production(excluding depletion) are P4 per ton.
Required:a. Compute the depletion cost per ton.b. Compute the total cost of inventory at December 31, 2020.c. Compute the total cost of goods sold for 2020.
1. The Fairy Company purchased a site for limestone quarry for P 100,000 on January 2,
2020. It estimates that the quarry will yield 400,000 tons of limestone. It estimates that its
retirement obligation has a fair value of P 20,000 after which the land can be sold for P
10,000. In 2020, 80,000 tons were quarried and 60,000 tons sold. Cost of production
(excluding depletion) are P4 per ton.
Required:
a. Compute the depletion cost per ton.
b. Compute the total cost of inventory at December 31, 2020.
c. Compute the total cost of goods sold for 2020.
2. Cooler Company acquired a tract of land containing an extractable natural resource. Cooler
is required by the purchase contract to restore the land to a condition suitable for
recreational use after it has extracted the natural resource. Geological surveys estimate
that the recoverable reserves will be 5,000,000 tons and that the land will have of
P1,000,000 after restoration. Relevant cost information as follows:
Land P 9,000,000…
Chapter 11 Solutions
Intermediate Accounting: Reporting And Analysis
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