Depletion On January 2, 2019, Whistler Company purchased land for $430,000, from which it is estimated that 350,000 tons of ore could be extracted. It estimates that the present value of the cost necessary to restore the land is $72,000, after which it could be sold for $29,000. During 2019, Whistler mined 86,000 tons and sold 73,000 tons. During 2020, Whistler mined 104,000 tons and sold 104,000 tons. At the beginning of 2021, Whistler spent an additional $110,000, which increased the reserves by 53,000 tons. In 2021, Whistler mined 134,000 tons and sold 117,000 tons. Whistler uses a FIFO cost flow assumption. Required: If required, round the depletion rate to the nearest cent and round the final answers to the nearest dollar. 1. Calculate the depletion included in the income statement and ending inventory for 2019, 2020, and 2021. 2019 Depletion deducted from income       Depletion included in inventory     2020 Depletion deducted from income       Depletion included in inventory     2021 Depletion deducted from income       Depletion included in inventory                              2. Complete the natural resources section of the balance sheet on December 31, 2019, 2020, and 2021, assuming that an accumulated depletion account is used. Whistler Company Balance Sheet (partial) December 31, 2019 - 2021 December 31, 2019           Mineral ore resources                                     Less: Accumulated depletion                                                December 31, 2020           Mineral ore resources     Less: Accumulated depletion                 December 31, 2021           Mineral ore resources     Less: Accumulated depletion           3. Assume Whistler's discount rate was 9%. What is the balance in the asset retirement obligation at 2019, 2020, and 2021? Whistler Company Asset retirement obligation 2019 - 2021 December 31, 2019                                                  December 31, 2020   December 31, 2021

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Chapter1: Financial Statements And Business Decisions
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Depletion

On January 2, 2019, Whistler Company purchased land for $430,000, from which it is estimated that 350,000 tons of ore could be extracted. It estimates that the present value of the cost necessary to restore the land is $72,000, after which it could be sold for $29,000.

During 2019, Whistler mined 86,000 tons and sold 73,000 tons. During 2020, Whistler mined 104,000 tons and sold 104,000 tons. At the beginning of 2021, Whistler spent an additional $110,000, which increased the reserves by 53,000 tons. In 2021, Whistler mined 134,000 tons and sold 117,000 tons. Whistler uses a FIFO cost flow assumption.

Required:

If required, round the depletion rate to the nearest cent and round the final answers to the nearest dollar.

1. Calculate the depletion included in the income statement and ending inventory for 2019, 2020, and 2021.
2019 Depletion deducted from income    
  Depletion included in inventory    
2020 Depletion deducted from income    
  Depletion included in inventory    
2021 Depletion deducted from income    
  Depletion included in inventory                             
2. Complete the natural resources section of the balance sheet on December 31, 2019, 2020, and 2021, assuming that an accumulated depletion account is used.
Whistler Company
Balance Sheet (partial)
December 31, 2019 - 2021
December 31, 2019    
     
Mineral ore resources                                    
Less: Accumulated depletion    
                                    
     
December 31, 2020    
     
Mineral ore resources    
Less: Accumulated depletion    
     
     
December 31, 2021    
     
Mineral ore resources    
Less: Accumulated depletion    
     
3. Assume Whistler's discount rate was 9%. What is the balance in the asset retirement obligation at 2019, 2020, and 2021?
Whistler Company
Asset retirement obligation
2019 - 2021
December 31, 2019                                                 
December 31, 2020  
December 31, 2021  
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