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- Texas Oil Company (TOC) paid $3,000,000 for an oil reserve estimated to hold 50,000 barrels ofoil. Oil production is expected to be 10,000 barrels in year 1, 30,000 barrels in year 2, and 10,000barrels in year 3. TOC expects to begin selling barrels from its oil inventory in year 4.Required:Assuming these estimates prove to be accurate, show the balances in the oil reserve, accumulateddepletion, and oil inventory accounts in each of the three years. What effect does this yearly depletion have on the income statement?Sergei Company purchases land for $4,000,000 from which it expects to extract 2,000,000 tons of coal. The estimated residual value is $400,000, and it mines 80,000 tons of coal in the first year. The unit depletion rate used to determine yearly depletion will be $1.80 per ton. $2.00 per ton. $18.00 per ton. $20.00 per ton.ABC, Inc. purchased an equipment at time=0 for $135,077. The shipping and installation costs were $35,367. The equipment is classified as a 7-year MACRS property. The investment in net working capital at time=0 was $15,451 which would be recouped at the end of the project. The project life is four years. At the end of the fourth year, the company will sell the equipment for $35,727. The annual cash flows are $69,318. What is the cash flow of the project in Year 4? That is solve for CF4. Assume that the tax rate is 15% The MACRS allowance percentages are as follows, starting with Year 1: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent.
- 5. In 2018, IRIS Company paid ₱4,000,000 to purchase land containing a total estimated 160,000 tons of extractable mineral deposits. The estimated value of the property after the mineral has been removed is ₱800,000. Extraction activities began in 2019 and by the end of the year, 20,000 tons had been recovered and sold. In 2020, geological studies indicated that the total amount of mineral deposits had been underestimated by 60,000 tons. During 2020, 30,000 tons were extracted and 28,000 tons were sold. How much depletion expense is to be presented in the cost of sales of 2020? * a. ₱ 436,364 b. ₱ 420,000 c. ₱ 392,000 d. ₱ 600,000In 2018, IRIS Company paid ₱4,000,000 to purchase land containing a total estimated 160,000 tons of extractable mineral deposits. The estimated value of the property after the mineral has been removed is ₱800,000. Extraction activities began in 2019 and by the end of the year, 20,000 tons had been recovered and sold. In 2020, geological studies indicated that the total amount of mineral deposits had been underestimated by 60,000 tons. During 2020, 30,000 tons were extracted and 28,000 tons were sold. 1.) What is the depletion rate per ton in 2020? a. 12.73 b. 20 c. 14 d. 15.56 2.) How much depletion expense is to be presented in the cost of sales of 2020? a. 420,000 b. 392,000 c. 436,364 d. 600,000 3.) What is the carrying value of the wasting asset? a. 3,180,000 b. 3,000,000 c. 3,040,000 d. 3,208,000In 2018, IRIS Company paid ₱4,000,000 to purchase land containing a total estimated 160,000 tons of extractable mineral deposits. The estimated value of the property after the mineral has been removed is ₱800,000. Extraction activities began in 2019 and by the end of the year, 20,000 tons had been recovered and sold. In 2020, geological studies indicated that the total amount of mineral deposits had been underestimated by 60,000 tons. During 2020, 30,000 tons were extracted and 28,000 tons were sold. a. How much depletion expense is to be presented in the cost of sales of 2020? b. What is the carrying value of the wasting asset?
- In 2018, IRIS Company paid ₱4,000,000 to purchase land containing a total estimated 160,000 tons of extractable mineral deposits. The estimated value of the property after the mineral has been removed is ₱800,000. Extraction activities began in 2019 and by the end of the year, 20,000 tons had been recovered and sold. In 2020, geological studies indicated that the total amount of mineral deposits had been underestimated by 60,000 tons. During 2020, 30,000 tons were extracted and 28,000 tons were sold. What is the depletion rate per ton in 2020?In 2018, IRIS Company paid ₱4,000,000 to purchase land containing a total estimated 160,000 tons of extractable mineral deposits. The estimated value of the property after the mineral has been removed is ₱800,000. Extraction activities began in 2019 and by the end of the year, 20,000 tons had been recovered and sold. In 2020, geological studies indicated that the total amount of mineral deposits had been underestimated by 60,000 tons. During 2020, 30,000 tons were extracted and 28,000 tons were sold. What is the depletion rate per ton in 2020? ₱ 15.56 ₱ 14 ₱ 12.73 ₱ 20 How much depletion expense is to be presented in the cost of sales of 2020? * ₱ 600,000 ₱ 436,364 ₱ 420,000 ₱ 392,000 What is the carrying value of the wasting asset? * ₱ 3,000,000 ₱ 3,208,000 ₱ 3,180,000 ₱ 3,040,000In 2018, IRIS Company paid ₱4,000,000 to purchase land containing a total estimated 160,000 tons of extractable mineral deposits. The estimated value of the property after the mineral has been removed is ₱800,000. Extraction activities began in 2019 and by the end of the year, 20,000 tons had been recovered and sold. In 2020, geological studies indicated that the total amount of mineral deposits had been underestimated by 60,000 tons. During 2020, 30,000 tons were extracted and 28,000 tons were sold. What is the carrying value of the wasting asset? ₱ 3,000,000 ₱ 3,040,000 ₱ 3,180,000 ₱ 3,208,000
- an oil company that has recently established a refinery in the West Philippines Sea at an initialcost of Php 650,000,000 and an estimated 128,000,000 liters of oil on it. What will be the depletion charge duringthe year where the company has produced 80,000,000 liters of oil?Shado, Incorporated, is considering an investment of $442,000 in an asset with an economic life of five years. The firm estimates that the nominal annual cash revenues and expenses at the end of the first year will be $281,300 and $88,400, respectively. Both revenues and expenses will grow thereafter at the annual inflation rate of 4 percent. The company will use the straight-line method to depreciate its asset to zero over five years. The salvage value of the asset is estimated to be $62,000 in nominal terms at that time. The one-time net working capital investment of $18,500 is required immediately and will be recovered at the end of the project. The corporate tax rate is 22 percent. What is the project’s total nominal cash flow from assets for each year? (A negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Year 0$-460,500selected answer correctYear 1$167,182selected…In 2018, DAISY Company paid ₱4,000,000 to purchase land containing a total estimated 160,000 tons of extractable mineral deposits. The estimated value of the property after the mineral has been removed is ₱800,000. Extraction activities began in 2019 and by the end of the year, 20,000 tons had been recovered and sold. In 2020, geological studies indicated that the total amount of mineral deposits had been underestimated by 60,000 tons. During 2020, 30,000 tons were extracted and 28,000 tons were sold. How much depletion expense is to be presented in the cost of sales of 2020? ₱ 392,000 ₱ 420,000 ₱ 600,000 ₱ 436,364