company purchased a tract of land for its natural resources at a cost of $1,500,000. It expects to mine 2,000,000 tons of ore from this land. The salvage value of the land is expected to be $250,000. The depletion expense per ton of ore is
Q: Perez Company acquires an ore mine at a cost of $1,400,000. It incurs additional costs of $400,000…
A: Req-1 Cost ($1400000 + $400000) $18,00,000 Salvage $2,00,000 Amount subjected to depletion…
Q: Khamsah Mining Company has purchased a tract of mineral land for $900,000. It is estimated that this…
A: The depletion and depreciation is the reduction in the book value of the asset due to the use or…
Q: Early in the current year, Tokay Co. purchased the Silverton Mine at a cost of $15,500,000. The mine…
A: Computation for the book value of the mine at year end is as follows:First we need to calculate the…
Q: Gimli Miners recently purchased the rights to a diamond mine. It is estimated that there are one…
A: Depletion is the reduction in value of natural resources over the period of time. This is charged as…
Q: For $42,950,000, Wesco Developers purchased land which their experts believe to contain 28.5 million…
A: Formula used for calculation: Depletion expense = ( Asset cost - Salvage value ) / Total estimated…
Q: Miller Mining acquired rights to a tract of land with the intent of extracting from the land a…
A: Depletion: It can be defined as a reduction or fall in the value of natural resources being used in…
Q: Vesco Mineral Resources purchased mineral rights to land in the foothills of the Santa Cristo…
A: Depletion per ton = (Cost of mineral rights to land - Residual value) / Estimated tons of mineralss…
Q: The asset cost of a coal mine is OMR 30000 and the coal mine is estimated to produce 120 tons of…
A: A depreciation is a non-cash expenses for the company. The depreciation expenses is charged because…
Q: PUP CAF Mining Company purchased a tract of land containing mineral resources for P54,000,000. The…
A: Particulars Amount Acquisition cost P54,000,000 Restoration and geological survey costs…
Q: For $42,950,000, Wesco Developers purchased land which their experts believe to contain 28.5 million…
A: Formula: Depletion expense per unit = ( Asset cost - Salvage value ) / Estimated Tons
Q: A certain mining company has acquired a coal mine for a cost of $4,500,000. No other costs are…
A: Step 1 Depletion is the expense charged over the extraction of natural resources output in a…
Q: Weber Company purchased a mining site for $585,330 on July 1. The company expects to mine ore for…
A: Depletion per tons = (Purchased Cost of mining site - estimated residual value) / anticipated tons =…
Q: In 20X1, ABC Co. paid P1M to purchase a land containing a total estimated 160,000 tons of…
A: Depletion rate per ton: = [Purchase cost - salvage value] / capacity of extraction Purchase…
Q: Colorado Mining paid $495,000 to acquire a mine with 45,000 tons of coal reserves. The following…
A: Depletion charge per unit is calculated by deducting the residual value from the cost of the asset…
Q: The Weber Company purchased a mining site for $510,498 on July 1. The company expects to mine ore…
A: Calculation of Depletion rate per tonne Depletion rate per tonne = Purchase price of mining site/…
Q: Weber Company purchased a mining site for $690,727 on July 1. The company expects to mine ore for…
A: b.$44,598.37
Q: Salter Mining Co. purchased the Northern Tier Mine for $61 million cash. The mine was estimated to…
A: Journal entry - It refers to the process where the business transactions are recorded in the books…
Q: For $18,048,000, R.R. Michaels Refining purchased land which their experts believe to contain 18.8…
A: Introduction: Depreciation: A decrease in the value of fixed assets of the company because of usage,…
Q: Perez Company acquires an ore mine at a cost of $3,640,000. It incurs additional costs of $1,019,200…
A: Depletion is charged to natural resources as depreciation is charged to fixed assets.
Q: In January, 2004, Nixon Corporation purchased a mineral mine for P6,800,000 with removable ore…
A: Depletion Expense: Depletion expense is determined to record the exhaustion of natural resources. It…
Q: During 2004, Bolton Corporation acquired a mineral mine for P3,000,000 of which P400,000 was…
A: As per the information provided : Mineral mine acquired for - P3,000,000 Ascribed to Land value -…
Q: LM Corporation purchased 20 acres of land for P120,000,000. The company expects to extract 5 million…
A: Purchase price of Land = P120,000,000 Exploration cost = P10,000,000 Dry well cost = P1,600,000…
Q: Sunny Company paid 4,000,000 for property containing natural resources of 2,500,000 tons of ore. The…
A: Natural resources are gifts of nature without which survival is impossible. In order to fulfill the…
Q: Underwood’s Miners recently purchased the rights to a diamond mine. It is estimated that there are…
A: Depletion expense = Cost * Extracted for the year / Total Extraction from the mine
Q: In January 20X1, ABC Mining Corporation purchased a mineral mine for P7,200,000 with removable ore…
A: Inventory is the stock which are available in hand for sale. The development costs are added on the…
Q: Castle Company purchased land containing an estimated 2.5 million tons of ore for a cost of…
A: Depletion charge per ton = (Cost of land containing ore - Cost of land without ore) / Estimated tons…
Q: LM Corporation purchased 20 acres of land for P120,000,000. The company expects to extract 5 million…
A: Cost of land = P120,000,000 Expected minerals to be extracted = 5,000,000 Salvage value = P6,000,000…
Q: In 20x1, Newman Company paid P1,000,000 to purchase land containing a total estimated 160,000 tons…
A: Solution: Total cost of land= P1,000,000. Estimated value after mineral have been removed= P200,000…
Q: On January 1, 20x1, DEF Mining Corp. purchased an ore mine at P30,000,000. The cost of exploration…
A: Cost of mine will also include development cost . Depletion Expense = Cost - Salvage value…
Q: Weber Company purchased a mining site for $617,434 on July 1. The company expects to mine ore for…
A: Depreciation or depletion is a decrease in the value of an asset due to various reasons like wear…
Q: Vandeventer Corporation purchased land containing 25.4 million barrels of naphthenic crude oil for…
A: Annual depletion cost: It is the amount by which the cost of natural resource is depleted over an…
Q: The Weber Company purchased a mining site for $580,128 on July 1. The company expects to mine ore…
A: Given, Cost of machone = $580,128 Total tons = 85,978 Depletion expense per ton = (Cost - Salvage…
Q: In 2018, the Marion Company purchased land containing a mineral mine for $1,600,000. Additional…
A: 1. Compute depletion and depreciation of the mine and the mining facilities and equipment for 2018…
Q: oration purchased a mineral mine for P7,200,000 with removable ore estimated by geological surveys…
A: Depletion can be defined as the method that is used to determine and allocate the cost of extracting…
Q: The Weber Company purchased a mining site for $573,259 on July 1. The company expects to mine ore…
A: For the use of natural resources, depletion expenses is charged (against profits). It is most common…
Q: Salter Mining Company purchased the Northern Tier Mine for $50 million cash. The mine was estimated…
A: DEPLETION PER ORE = (COST - RESIDUAL VALUE) / NUMBER OF TOTAL TONS OF ORE = ($50 MILLION - $1.5…
Q: LM Corporation purchased 20 acres of land for P120,000,000. The company expects to extract 5 million…
A: LM Corporation's Purchased 20 acres of land = P120000000 Company expects the extract of minerals = 5…
Q: At the beginning of Year 1, Ithaca Incorporated purchased land for $1,500,000 from which it expects…
A: Depletion is the process by which the cost of natural resources such as oil reserves, mineral…
Q: A truck for hauling coal has an estimated net cost of $55,000 and is expected to give service for…
A: Depreciation: It is a non-cash expense. This is the decrease in the value of a fixed asset…
Q: Gimli Miners recently purchased the rights to a diamond mine. It is estimated that there are one…
A: Depletion arte per tons = (Cost of rights - Residual value) / Estimated tons of minerals =…
Q: In January, 2004, Nixon Corporation purchased a mineral mine for P6,800,000 with removable ore…
A: The depletion expense is charged on mines on the basis of units of mines extracted.
Q: 1. In 20X4, ABC Mining Inc. purchased land for P5,600,000 that had a natural resource supply…
A: Inventoriable Cost It is the total direct expense incurred related to the purchase of inventory.…
Q: Pharoah Company purchased for $4,543,000 a mine that is estimated to have 45,430,000 tons of ore and…
A: Introduction: Depletion: Depletion expense to be recorded in Income statement. Depletion is…
Q: At the beginning of the current year, Handsome Company purchased a mineral mine for P36,000,000 with…
A: Total cost of mineral mine = purchased costs + development costs = P36,000,000 + P10,800,000 =…
Q: The Weber Company purchased a mining site for $674,927 on July 1. The company expects to mine ore…
A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…
Q: on July 1, 2022, Trisha Company purchased the rights to a mine for P13,200,000, of which P1,200,000…
A: The depreciation expense is charged on tangible assets of the business, the depletion is charged on…
Q: At the beginning of current year, Nilli company purchased a coal mine for P30,000,000. Removable…
A: All natural resources that are being acquired by the business loses their value over the period of…
Q: Weber Company purchased a mining site for $525,247 on July 1. The company expects to mine ore for…
A: Given, Cost of mining site = $525,247 Residual value = $49,377 Total tons = 85,242 tons Tons…
Q: Kelly Company acquired an iron mine for $2,349,000. Kelly paid a $1,000 filing fee with the county…
A: Gross Profit = Sales - Cost of Goods Sold
A company purchased a tract of land for its natural resources at a cost of $1,500,000. It expects to mine 2,000,000 tons of ore from this land. The salvage value of the land is expected to be $250,000. The depletion expense per ton of ore is
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- Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one it expects to use the truck for 26,000 miles. Calculate the annual depreciation expense.Gimli Miners recently purchased the rights to a diamond mine. It is estimated that there are one million tons of ore within the mine. Gimli paid $23,100,000 for the rights and expects to harvest the ore over the next ten years. The following is the expected extraction for the next five years. Year 1: 50,000 tons Year 2: 90,000 tons Year 3: 100,000 tons Year 4: 110,000 tons Year 5: 130,000 tons Calculate the depletion expense for the next five years, and create the journal entry for year one.Underwoods Miners recently purchased the rights to a diamond mine. It is estimated that there are two million tons of ore within the mine. Underwoods paid $46,000,000 for the rights and expects to harvest the ore over the next fifteen years. The following is the expected extraction for the next five years. Year 1: 50,000 tons Year 2: 900,000 tons Year 3: 400,000 tons Year 4: 210,000 tons Year 5: 150,000 tons Calculate the depletion expense for the next five years and create the journal entry for year one.
- Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000 hours, the company expects to sell the asset for 150,000. What is the depreciation rate per hour based on activity?Dunedin Drilling Company recently acquired a new machine at a cost of 350,000. The machine has an estimated useful life of four years or 100,000 hours, and a salvage value of 30,000. This machine will be used 30,000 hours during Year 1, 20,000 hours in Year 2, 40,000 hours in Year 3, and 10,000 hours in Year 4. With DEPREC5 still on the screen, click the Chart sheet tab. This chart shows the accumulated depreciation under all three depreciation methods. Identify below the depreciation method that each represents. Series 1 _____________________ Series 2 _____________________ Series 3 _____________________ When the assignment is complete, close the file without saving it again. Worksheet. The problem thus far has assumed that assets are depreciated a full year in the year acquired. Normally, depreciation begins in the month acquired. For example, an asset acquired at the beginning of April is depreciated for only nine months in the year of acquisition. Modify the DEPREC2 worksheet to include the month of acquisition as an additional item of input. To demonstrate proper handling of this factor on the depreciation schedule, modify the formulas for the first two years. Some of the formulas may not actually need to be revised. Do not modify the formulas for Years 3 through 8 and ignore the numbers shown in those years. Some will be incorrect as will be some of the totals. Preview the printout to make sure that the worksheet will print neatly on one page, and then print the worksheet. Save the completed file as DEPRECT. Hint: Insert the month in row 6 of the Data Section specifying the month by a number (e.g., April is the fourth month of the year). Redo the formulas for Years 1 and 2. For the units of production method, assume no change in the estimated hours for both years. Chart. Using the DEPREC5 file, prepare a line chart or XY chart that plots annual depreciation expense under all three depreciation methods. No Chart Data Table is needed; use the range B29 to E36 on the worksheet as a basis for preparing the chart if you prepare an XY chart. Use C29 to E36 if you prepare a line chart. Enter your name somewhere on the chart. Save the file again as DEPREC5. Print the chart.Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one the company expects the truck to be driven for 26,000 miles; in year two, 30,000 miles; and in year three, 40,000 miles. Consider how the purchase of the truck will impact Montellos depreciation expense each year and what the trucks book value will be each year after depreciation expense is recorded.
- Dunedin Drilling Company recently acquired a new machine at a cost of 350,000. The machine has an estimated useful life of four years or 100,000 hours, and a salvage value of 30,000. This machine will be used 30,000 hours during Year 1, 20,000 hours in Year 2, 40,000 hours in Year 3, and 10,000 hours in Year 4. Dunedin buys equipment frequently and wants to print a depreciation schedule for each assets life. Review the worksheet called DEPREC that follows these requirements. Since some assets acquired are depreciated by straight-line, others by units of production, and others by double-declining balance, DEPREC shows all three methods. You are to use this worksheet to prepare depreciation schedules for the new machine.A machine costing 350,000 has a salvage value of 15,000 and an estimated life of three years. Prepare depreciation schedules reporting the depreciation expense, accumulated depreciation, and book value of the machine for each year under the double-declining-balance and sum-of-the-years-digits methods. For the double-declining-balance method, round the depreciation rate to two decimal places.Urquhart Global purchases a building to house its administrative offices for $500,000. The best estimate of the salvage value at the time of purchase was $45,000, and it is expected to be used for forty years. Urquhart uses the straight-line depreciation method for all buildings. After ten years of recording depreciation, Urquhart determines that the building will be useful for a total of fifty years instead of forty. Calculate annual depreciation expense for the first ten years. Determine the depreciation expense for the final forty years of the assets life, and create the journal entry for year eleven.
- 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.Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the assets life, and create the journal entry for year five.Utica Corporation paid 360,000 to purchase land and a building. An appraisal showed that the land is worth 100,000 and the building is worth 300,000. What cost should Utica assign to the land and to the building, respectively?
