In March, 2020, Sunland Company purchased a coal mine for $8110000. Removable coal is estimated at 1500000 tons. Sunland is required to restore the land at an estimated cost of $940000, and the land should have a value of $820000. The company incurred $1970000 of development costs preparing the mine for production. During 2020, 300000 tons were removed and 240000 tons were sold. The total amount of depletion that Sunland should record for 2020 is O $1852000. O $1481600. O $1632000. O $2040000.
Q: In 2020, Tableta Company paid P4,000,000 to purchase a land containing a total estimated 160,000…
A: Annual depreciation= (cost of the assets - residual value) / life of the assets = (P1,500,000-0) /…
Q: During 2018, Wright Tool Company purchased a building site for its proposed research and development…
A: a. The items related to research and development activities should be reported on as below in the…
Q: e Fairy Company purchased a site for limestone quarry for P 100,000 on January 2,2020. It estimates…
A: a) The depletion cost per ton. Cost of quarry = P100,000 Asset retirement obligation value =…
Q: In 2018, Titus paid #6,000,000 to purchase land containing a total estimated 160,000 tons of…
A: Depletion rate per ton= (Initial purchase amount - salvage value] / capacity of extraction of…
Q: In 2018, IRIS Company paid ₱4,000,000 to purchase land containing a total estimated 160,000 tons of…
A: Given in the question: Value of land at beginning 2018 = ₱4,000,000 Salvage value = ₱800,000 Total…
Q: At the beginning of 2021, Terra Lumber Company purchased a timber tract from Boise Cantor for…
A: Formulas: Depletion per feet (units-of-production method) = (Cost of timber tract - residual value)…
Q: On April 17, 2021, the Loadstone Mining Company purchased the rights to a coal mine. The purchase…
A: DepletionDepletion is an accrual accounting technique used to allocate the cost of extracting…
Q: In January, 2020, Waterway Industries purchased a mineral mine for $4800000 with removable ore…
A: Given that: Purchase price of Mine = $48,00,000 Total tons = 20,00,000 Residual value = $280,000…
Q: On January 1, 2020, Sapphire Mining Company purchased land with valuable natural ore deposits for…
A: The depletion expense refers to the decrease in the value of the natural resource used in the…
Q: On Jan. 1, 2020, the construction of a high-tech condominium building was completed for a total cost…
A: Depreciation is the amount of reduction in the cost of the assets due to use of the assets,…
Q: In January 2018, HUKAY Mining Corporation purchased a mineral mine for P7,200,000 with removable ore…
A: Depletion can be defined as the method that is used to determine and allocate the cost of extracting…
Q: In 2020, Tableta Company paid P4,000,000 to purchase a land containing a total estimated 160,000…
A: Under straight line method, Depreciation expense for equipment can be calculated as: = (Cost -…
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: On July 4, 2020, ZY Company purchased the mineral rights to a granite deposit for 2,400,000. It is…
A: The depletion expense is charged on minerals with extraction and minerals sold during the period.
Q: Reveille, Inc., purchased Machine #204 on April 2021, and placed the machine into production on…
A: Depreciation is the depletion in the value of the asset due to use of the asset.
Q: On January 1, 2019, a company completed construction of a nuclear power plant. The total cost of the…
A: Decommissioning liabilities- It means any costs, charges, expenses, liabilities and obligations…
Q: On January 2, 2018, ABC Company purchased land for ₱450,000, from which it estimated that 400,000…
A: Cost of Sales : It is the amount of cost that made the goods available for sale which typically will…
Q: On January 2, 2019, Whistler Company purchased land for $450,000, from which it is estimated that…
A: Depletion base includes Purchase cost development cost PV of anticipated restoration cost less:…
Q: in 2020, Tableta company paid P4,000,000 to purchase a land containing a total estimated 160,000…
A: Annual depreciation= (cost of the assets - residual value) / life of the assets = (P1,500,000-0) /…
Q: In 2017, a company acquired a silver mine for P50,000. In 2018, the company constructed a road to…
A: A slow decrease of the asset value which is tangible is depreciation and depletion is such decrease…
Q: On January 2, 2019, Whistler Company purchased land for $450,000, from which it is estimated that…
A: Depletion in accounting refers to the technique used in allocating or assigning the cost of…
Q: In 2018, IRIS Company paid ₱4,000,000 to purchase land containing a total estimated 160,000 tons of…
A: The questions are multiple choice questions Required Choose the Correct Option.
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: Questions: What is the depletion for 2020? * What is the depreciation for 2020? *
A: Tangible assets are depreciated where as intangible assets/ rights are depleted over the useful…
Q: During 2018, Sandhill Company purchased a building site for its proposed research and development…
A: Income statement is a statement prepared to calculate the net income of a company after deducting…
Q: In 2018, DAISY Company paid ₱4,000,000 to purchase land containing a total estimated 160,000 tons of…
A: Depletion is defined as the technique of accrual accounting which is used for assigning the…
Q: On January 2, 2019, Whistler Company purchased land for $490,000, from which it is estimated that…
A: 2019 unit depletion rate = [490,000 + 55,000 - 33,000 ] / 420,000 = 1.22 per ton 2021 unit depletion…
Q: On January 2, 2018, ABC Company purchased land for ₱450,000, from which it estimated that 400,000…
A: SOLUTION- DEPLETION IS A METHOD FOR ALLOCATING THE EXPENSE OF HARVESTING NATURAL PRODUCTS FROM EARTH…
Q: On December 31, 2020, a company invested $2,150,000 in an asset. The company estimates that…
A: A journal entry is a form of accounting entry that is used to report a business transaction in 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: On April 20, 2020, Wilhamette Incorporated purchased the right to remove timber from a 20,000-acre…
A: Any right purchased which will be used in coming years is a intangible assets which is to be…
Q: During 2018, Sandhill Company purchased a building site for its proposed research and development…
A: A) Income Statement for 2020.
Q: In 2018, IRIS Company paid ₱4,000,000 to purchase land containing a total estimated 160,000 tons of…
A: Given information: Cost = ₱4,000,000 Residual value = ₱800,000 Expected tons to be extracted =…
Q: In 2018, DAISY Company paid ₱4,000,000 to purchase land containing a total estimated 160,000 tons of…
A: Formula: Depletion per Ton = ( Cost of land - salvage value ) / Estimated tons
Q: On January, 2023, Big Company purchased a mineral mine for P2,640,000 with removable ore estimated…
A: Depletion expenses: Depletion expenses is the reduction in the profit due to the use of natural…
Q: In January, 2020, Swifty Corporation purchased a mineral mine for $4800000 with removable ore…
A: The company will use the assets for many years. Since the assets are used for many years in the…
Q: 000 tons. In 2018, the company mined 140,000 tons and sold 130,000 tons. The company uses a FIFO…
A: Depletion Expense: The cost allocation method used for natural resources like mining deposits,…
Q: In 2020, Tableta Company paid P4,000,000 to purchase a land containing a total estimated 160,000…
A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…
Q: On February 1, 2020, Nelson Corporation purchased a parcel of land as a factory site for $320,000.…
A: Fixed Assets: It refers to the long-term assets having a useful life of more than a year which is,…
Q: n July 1, 2020, FREESIA Company purchased the rights to a mine for ₱13,200,000, of which ₱1,200,000…
A: Solutions: 1) Depletion is charged in books in order to record reduction in value of natural…
Q: On April 1, 2019, CanAm Company purchased a copper mine at a cost of $14,000,000. The mine was…
A: Depletion expense per ton = (Cost - Residual value)/Total estimated tons
Q: In August 2020, Heavy-lift Helicopters Ltd. purchased a new helicopter for its logging and heavy…
A: Units of production method A method that is used to calculate depreciation and under which the usage…
Q: how much should the company include as depletion in its cost of goods sold?
A: Depletion expenses are the expenses that are charged against the profit due to the usage of natural…
Q: At the beginning of 2021, Terra Lumber Company purchased a timber tract from Boise Cantor for…
A: Calculate the amount of depletion of the timber tract.
Q: On January 2, 2019, Whistler Company purchased land for $450,000, from which it is estimated that…
A: Depletion is like depreciation. It is used in mines. Here Whistler company has purchased a mine at…
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…
Q: During 2020, ABC Company acquired a mineral mine for P1,500,000 of which P200,000 was ascribed to…
A: Formula: Total Depletion amount = Depletion per unit x Total extracted units.
Q: On July 1, 2020, FREESIA Company purchased the rights to a mine for ₱13,200,000, of which ₱1,200,000…
A: Depletion is charged in books in order to record reduction in value of natural resources over the…
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- 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?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.Alfredo Company purchased a new 3-D printer for $900,000. Although this printer is expected to last for ten years, Alfredo knows the technology will become old quickly, and so they plan to replace this printer in three years. At that point, Alfredo believes it will be able to sell the printer for $15,000. Calculate yearly depreciation using the double-declining-balance method.
- 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.On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.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.
- Comprehensive: Acquisition, Subsequent Expenditures, and Depreciation On January 2, 2019, Lapar Corporation purchased a machine for 50,000. Lapar paid shipping expenses of 500, as well as installation costs of 1,200. The company estimated that the machine would have a useful life of 10 years and a residual value of 3,000. On January 1, 2020, Lapar made additions costing 3,600 to the machine in order to comply with pollution-control ordinances. These additions neither prolonged the life of the machine nor increased the residual value. Required: 1. If Lapar records depreciation expense under the straight-line method, how much is the depreciation expense for 2020? 2. Assume Lapar determines the machine has three significant components as shown below. If Lapar uses IFRS, what is the amount of depreciation expense that would be recorded?Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.
- Hathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines residual value was 500 and its expected service life was 5 years. Hathaway computes depreciation expense to the nearest whole month. Required: 1. Compute depredation expense (rounded to the nearest dollar) for 2019 and 2020 using the: a. straight-line method b. sum-of-the-years-digits method c. double-declining-balance method 2. Next Level Which method produces the highest book value at the end of 2020? 3. Next Level Which method produces the highest charge to income in 2020? 4. Next Level Over the life of the asset, which method produces the greatest amount of depreciation expense?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?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.