1. On July 1, 2024, The Exploration Company, invests $1.3 million in a mine that is estimated to have 800,000 tonnes of ore. The company estimates that the property will be sold for $100,000 when production at the mine has ended. During the last six months of 2024, 100,000 tonnes of ore are mined and sold. The Exploration Company has a December 31 fiscal year end. a) Record the 2024 depletion. b) Show how the mine and any related accounts are reported on the December 31, 2024, income statement and balance sheet. Apply the Accounting Concepts.
1. On July 1, 2024, The Exploration Company, invests $1.3 million in a mine that is estimated to have 800,000 tonnes of ore. The company estimates that the property will be sold for $100,000 when production at the mine has ended. During the last six months of 2024, 100,000 tonnes of ore are mined and sold. The Exploration Company has a December 31 fiscal year end. a) Record the 2024 depletion. b) Show how the mine and any related accounts are reported on the December 31, 2024, income statement and balance sheet. Apply the Accounting Concepts.
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 58P
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1. On July 1, 2024, The Exploration Company, invests $1.3 million in a mine that is estimated to have 800,000 tonnes of ore. The company estimates that the property will be sold for $100,000 when production at the mine has ended. During the last six months of 2024, 100,000 tonnes of ore are mined and sold. The Exploration Company has a December 31 fiscal year end.
a) Record the 2024 depletion.
b) Show how the mine and any related accounts are reported on the December 31, 2024, income statement and
Apply the Accounting Concepts.
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