On January 2, 2019, Whistler Company purchased land for $450,000, 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 $59,000, after which it could be sold for $21,000. During 2019, Whistler mined 73,000 tons and sold 51,000 tons. During 2020, Whistler mined 95,000 tons and sold 103,000 tons. At the beginning of 2021, Whistler spent an additional $90,000, which increased the reserves by 57,000 tons. In 2021, Whistler mined 131,000 tons and sold 124,000 tons. Whistler uses a FIFO cost flow assumption. 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 $
On January 2, 2019, Whistler Company purchased land for $450,000, 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 $59,000, after which it could be sold for $21,000. During 2019, Whistler mined 73,000 tons and sold 51,000 tons. During 2020, Whistler mined 95,000 tons and sold 103,000 tons. At the beginning of 2021, Whistler spent an additional $90,000, which increased the reserves by 57,000 tons. In 2021, Whistler mined 131,000 tons and sold 124,000 tons. Whistler uses a FIFO cost flow assumption. 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 $
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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On January 2, 2019, Whistler Company purchased land for $450,000, 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 $59,000, after which it could be sold for $21,000.
During 2019, Whistler mined 73,000 tons and sold 51,000 tons. During 2020, Whistler mined 95,000 tons and sold 103,000 tons. At the beginning of 2021, Whistler spent an additional $90,000, which increased the reserves by 57,000 tons. In 2021, Whistler mined 131,000 tons and sold 124,000 tons. Whistler uses a FIFO cost flow assumption.
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 | ||
| $ |
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