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

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

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 13P

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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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