Everly Corporation acquires a coal mine at a cost of $400,000. Intangible development costs total $100,000. After extraction has occurred, Everly must restore the property (estimated fair value of the obligation is $80,000), after which it can be sold for $160,000. Everly estimates that 4,000 tons of coal can be extracted. If 700 tons are extracted the first year, prepare the journal entry to record depletion.

Q: Your client, Hazelton Mining, recently entered into an agreement to obtain the rights to operate a…

A: Accretion  The gradual growth of assets and revenues as a result of industry expansion, internal…

Q: Your client, Hazelton Mining, recently entered into an agreement to obtain the rights to operate a…

A: A journal entry is a form of accounting entry that is used to report a business transaction in a…

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: Bramble Corporation acquires a coal mine at a cost of $456,000. Intangible development costs total…

A: Depletion Expenses:- For the use of Natural Resources, this is an expense that gets charged and…

Q: 6. On July 1, 2020, FREESIA Company purchased the rights to a mine for ₱13,200,000, of which…

A: Depletion is charged in books in order to record reduction in value of natural resources over the…

Q: Tamarisk Corporation acquires a coal mine at a cost of $464,000. Intangible development costs total…

A: Depletion expense = (Cost - Salvage value) * coal extracted / Total coal estimated to be available =…

Q: Novak Corporation acquires a coal mine at a cost of $ 831,000. Intangible development costs total $…

A: Total Cost of mine = Total purchase price + Development costs + restoration costs =…

Q: Early in the current year, Tokay Co. purchased the Silverton Mine at a cost of $20,000,000. The mine…

A: Natural resources: Resources that occur from nature are called natural resources. It is not…

Q: Pina Colada Corporation acquires a coal mine at a cost of $ 863,800. Intangible development costs…

A: Solution:- Calculation of Depletion note per ton as follows;- =($863,800+$221,000+$93,000-$120,000)…

Q: On July 1, 2021, Lambda Company, a calendar year entity purchased the rights to a mine. The total…

A: Cost of right = P14,000,000 - P2,000,000 = P12,000,000 Reserves used during the year = 25,000 tons x…

Q: On June 1, 2021, ABC Company purchased rights to a mine for P30,000,000, of which, P3,000,000 was…

A: Cost of mine = Total purchase value - Amount allocable to land = 30000000 - 3000000 = 27,000,000

Q: Waterway Corporation acquires a coal mine at a cost of $ 476,000. Intangible development costs total…

A: Depletion: It is often defined as a fall in the value of a natural resource because of its…

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: Catherine Company acquired a coal mine at a cost of P25,000,000. Intangible development cost totaled…

A: Depletion rate:   To compute a unit depletion rate, subtract the salvage value of the asset from…

Q: Stumped, Inc., purchased the timber rights for $7,000,000. It is expected to produce a total of…

A: Depletion is an accrual accounting technique used to allocate the cost of extracting natural…

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: f 18,000 tons were extracted during the first year, which of the following would be included in the…

A: Journal refers to the process of recording all the monetary transactions which shows all the credit…

Q: On Jan 1, 20X1 ABC Mining Co. purchased a mine for P2,640,000 with removable ore estimated at…

A: Depletion is the reduction in the value of natural resources due to extraction. In accounting, this…

Q: On June 1, 2021, ABC Company purchased rights to a mine for P30,000,000, of which, P3,000,000 was…

A: Annual Depreciation (straight line method) = (Cost of the assets - Residual value) / Expected life…

Q: On July 4, 2020, Wyoming Mining Company purchased the mineral rights to a granite deposit for…

A: Assets used over the years will face a depreciation each year which refers to the reduction in the…

Q: Alcide Mining Company purchased land on February 1, 2020, at a cost of $1,190,000. It estimated that…

A: a. Compute the per unit material cost.

Q: On January 1, 2021, a business paid $6.400,000 for land with mineral deposits. Over the following…

A: The process of defining, assessing, and reporting transactions to regulatory authorities, tax…

Q: At the beginning of current year, Nilli Company purchased a coal mine for P30,000,000. Removable…

A: Depletion expense is a charge against profits for the use of natural resources.it is most commonly…

Q: Lipaopao Corporation acquires a coal mine at a cost of p 5,000,000. Intangible development costs…

A: Initial cost of asset will include cost of acquisition, development cost and present value of…

Q: eight years. However, after all the resources are removed, the equipment will be of no use and will…

A: Depreciatioin is charged to record reductiion in value of asset over the period of time.…

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: Pronghorn Corporation acquires a coal mine at a cost of $484,000. Intangible development costs total…

A:

Q: On May, 1, 2020, Star Mines Inc. purchased an ore mine for $2,400,000 to access an estimated…

A: Solution: The ore mine should be recorded at = Purchase cost of mine + Development cost + Present…

Q: During the year Gambler  acquired an iron ore mine at a cost of $6 million. In addition, when all…

A: GIVEN   During the year Gambler  acquired an iron ore mine at a cost of $6 million. In addition,…

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: Billings Corporation acquires a coal mine at a cost of $2,000,000. Intangible development costs…

A: Depletion cost per ton = (Cost of the Coal mine - Residual value) / Estimated quantity of coal…

Q: Your client, Hazelton Mining, recently entered into an agreement to obtain the rights to operate a…

A: Introduction:- Hazelton Mining has agreed to pay $15 million for the rights to operate a coal mine…

Q: our client, Hazelton Mining, recently entered into an agreement to obtain the rights to operate a…

A: Journal entries form the basis for other accounting tasks such as ledger account preparation, trial…

Q: Crane Corporation acquires a coal mine at a cost of $404,000. Intangible development costs total…

A: The question is based on the concept of Journal Entry.

Q: Your client, Hazelton Mining, recently entered Into an agreement to obtain the rights to operate a…

A: Working note:

Q: Frank acquires a coal mine at a cost of 400,000. Intangible development costs total 100,000. After…

A: Depreciable cost= [Purchase cost + Development cost + Fair value obligation - sale value] / Number…

Q: Headland Mining Company purchased land on February 1, 2020, at a cost of $939,500. It estimated that…

A: Total cost of land = Cost of land+Restoration obligation+Development cost-Resale value of the…

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: Tamarisk Mining Company purchased land on February 1, 2020, at a cost of $945,100. It estimated that…

A: We have the following information: Tamarisk Mining Company purchased land on February 1, 2020, at a…

Q: 7. On July 1, 2020, FREESIA Company purchased the rights to a mine for ₱13,200,000, of which…

A: Depreciation is charged to record reduction in value of asset over the period of time.

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: 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: Tamarisk Mining Company purchased land on February 1, 2020, at a cost of $ 914,300. It estimated…

A: Cost Per Unit: It is calculated by taking into account two elements - variable cost and fixed cost -…

Q: In January 2020, Fritz Mining Corporation purchased a mineral mine for $6,300,000 with removable ore…

A: Calculate the depletion cost per unit as follows: Depletion cost per unit = (Purchase cost - Ore…

Q: In January 2022, Proton Mining Corporation purchased a minera mine for P4,200,000 with removable ore…

A: Under the units-of-activity method of depreciation, the asset's cost (less any salvage value) is…