On July 23 of the current year, Dakota Mining Company pays $7,121,760 for land estimated to contain 9,624,000 tons of recoverable ore. It installs and pays for machinery costing $1,828,560 on July 25. The company removes and sells 494,000 tons of ore during its first five months of operations ending on December 31. Depreciation of the machinery is in proportion to the mine's depletion as the machinery will be abandoned after the ore is mined. (e) If the machine will be used at another site when extraction is complete, how would we depreciate this machine? Depreciated

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On July 23 of the current year, Dakota Mining Company pays $7,121,760 for land estimated
to contain 9,624,000 tons of recoverable ore. It installs and pays for machinery costing
$1,828,560 on July 25. The company removes and sells 494,000 tons of ore during its
first five months of operations ending on December 31. Depreciation of the machinery is in
proportion to the mine's depletion as the machinery will be abandoned after the ore is
mined.
(e) If the machine will be used at another site when extraction is complete, how would we depreciate this
machine?
Depreciated
Transcribed Image Text:On July 23 of the current year, Dakota Mining Company pays $7,121,760 for land estimated to contain 9,624,000 tons of recoverable ore. It installs and pays for machinery costing $1,828,560 on July 25. The company removes and sells 494,000 tons of ore during its first five months of operations ending on December 31. Depreciation of the machinery is in proportion to the mine's depletion as the machinery will be abandoned after the ore is mined. (e) If the machine will be used at another site when extraction is complete, how would we depreciate this machine? Depreciated
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