On July 4, 2020, Wyoming Mining Company purchased the mineral rights to a granite deposit for $2,400,000. It is estimated that the recoverable granite will be 400,000 tons. During 2020, 100,000 tons of granite was extracted and 60,000 tons were sold. The amount of depletion recognized for 2020 would be
Q: On January 1, 2018, Nickel Co. purchased a land for P12,000,000. The company expected to extract…
A: Year 2018 Purchase price of land = P12,000,000 Expected minerals to be extracted = 2,000,000…
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 March, 2020, Sunland Company purchased a coal mine for $8110000. Removable coal is estimated at…
A: Depreciation , amortization , depletion all means the fall in value of assets due to one reason or…
Q: n 2018, IRIS Company paid ₱4,000,000 to purchase land containing a total estimated 160,000 tons of…
A: Given information: Purchase price = ₱4,000,000 Total estimated tons = 160,000 Salvage 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: Bassinger Company purchases an oil tanker depot on January 1, 2022, at a cost of $600,000. Bassinger…
A: Journal entry is the book of original entry where first transactions are recorded in the books of…
Q: in 2020, ABC Company paid P4,000,000 to purchase land containing a total estimated 160,000 tons of…
A: Depletion refers to the allocation or expense of extracting natural resources from the surface of…
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 2018, IRIS Company paid ₱4,000,000 to purchase land containing a total estimated 160,000 tons of…
A: a) Depletion Expenses to charge to Cost of Sales in 2020: Year 2019: Cost of the land: ₱4,000,000…
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: a. How much is the depletion charge in 2022? b. Assuming that of the 300,000 ounces of gold…
A: Depletion refers to the reducing in the value of natural resources of the earth from extraction of…
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: 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: 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 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: On July 1, 2020, FREESIA Company purchased the rights to a mine for ₱13,200,000, of which ₱1,200,000…
A: Depreciation is charged to record reduction in value of asset over the period of time.
Q: On January 1, 2018, Lam Company, a calendar year corporation, purchased the rights to a mine. The…
A: Compute the mine value as follows: Mine for depletion=Total purchase price-Allocation to…
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: Sunny Company paid 4,000,000 for property containing natural resources of 2,500,000 tons of ore. The…
A: Natural resources are gifts of nature without which survival is impossible. In order to fulfill the…
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: 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: Nash Mining Company purchased land on February 1, 2020, at a cost of $ 914,300. It estimated that a…
A:
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: On January 1, 2021, Stanford Company purchased a mining site that will have to be restored to…
A: The answer is stated below:
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: 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: A company purchased land containing mineral deposits for $6,400,000 on January 1, 2021. The company…
A: The answer is stated below:
Q: how much should the company include as depletion in its cost of goods sold? * 1,440,000
A: The cost incurred in producing the goods sold, such as direct cost, is known as the cost of goods…
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: On July 1,2021, Phantom Corporation purchased the rights to a mine for a total purchase price of…
A: Depreciation , amortization , depletion all means the fall in value of assets due to one reason or…
Q: On July 1, 2020, FREESIA Company purchased the rights to a mine for ₱13,200,000, of which ₱1,200,000…
A: Answer 1) Given: Depletion base =₱13,200,000-₱1,200,000=₱12000000Salvage value =0
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: n July 1, 2019, Lam Company, a calendar year entity, purchased the rights to a mine. The total…
A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…
Q: On January 1, 2018, Nickel Co. purchased a land for P12,000,000. The company expected to extract…
A: Cost of land = $12,000,000 Expected extraction = 2,000,000 Time = 20 years Capacity raised =…
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: 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: 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: Compute the depletion cost per ton. Round your answer to three decimal places. Compute the total…
A: Depletion: It refers to the process of proportionately distributing the cost of the extracting…
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: On March 31, 2021, M. Belotti purchased the right to remove gravel from an old rock quarry. The…
A: Depletion is the reduction in value of natural resources over the period of time. This is recorded…
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: 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…
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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- 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.The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining legal life of twelve years is bought, and Hanna expects to be able to use it for six years. It is purchased at a cost of $48,000. B. A copyright with a remaining life of thirty years is purchased, and Hanna expects to be able to use it for ten years. It is purchased for $70,000. Determine the annual amortization amount for each intangible asset.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 it expects to use the truck for 26,000 miles. Calculate the annual depreciation expense.
- Underwoods Miners recently purchased the rights to a diamond mine. It is estimated that there are two million tons of ore within the mine. Underwoods paid $46,000,000 for the rights and expects to harvest the ore over the next fifteen years. The following is the expected extraction for the next five years. Year 1: 50,000 tons Year 2: 900,000 tons Year 3: 400,000 tons Year 4: 210,000 tons Year 5: 150,000 tons Calculate the depletion expense for the next five years and create the journal entry for year one.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.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.
- Dunedin Drilling Company recently acquired a new machine at a cost of 350,000. The machine has an estimated useful life of four years or 100,000 hours, and a salvage value of 30,000. This machine will be used 30,000 hours during Year 1, 20,000 hours in Year 2, 40,000 hours in Year 3, and 10,000 hours in Year 4. With DEPREC5 still on the screen, click the Chart sheet tab. This chart shows the accumulated depreciation under all three depreciation methods. Identify below the depreciation method that each represents. Series 1 _____________________ Series 2 _____________________ Series 3 _____________________ When the assignment is complete, close the file without saving it again. Worksheet. The problem thus far has assumed that assets are depreciated a full year in the year acquired. Normally, depreciation begins in the month acquired. For example, an asset acquired at the beginning of April is depreciated for only nine months in the year of acquisition. Modify the DEPREC2 worksheet to include the month of acquisition as an additional item of input. To demonstrate proper handling of this factor on the depreciation schedule, modify the formulas for the first two years. Some of the formulas may not actually need to be revised. Do not modify the formulas for Years 3 through 8 and ignore the numbers shown in those years. Some will be incorrect as will be some of the totals. Preview the printout to make sure that the worksheet will print neatly on one page, and then print the worksheet. Save the completed file as DEPRECT. Hint: Insert the month in row 6 of the Data Section specifying the month by a number (e.g., April is the fourth month of the year). Redo the formulas for Years 1 and 2. For the units of production method, assume no change in the estimated hours for both years. Chart. Using the DEPREC5 file, prepare a line chart or XY chart that plots annual depreciation expense under all three depreciation methods. No Chart Data Table is needed; use the range B29 to E36 on the worksheet as a basis for preparing the chart if you prepare an XY chart. Use C29 to E36 if you prepare a line chart. Enter your name somewhere on the chart. Save the file again as DEPREC5. Print the chart.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?Dunedin Drilling Company recently acquired a new machine at a cost of 350,000. The machine has an estimated useful life of four years or 100,000 hours, and a salvage value of 30,000. This machine will be used 30,000 hours during Year 1, 20,000 hours in Year 2, 40,000 hours in Year 3, and 10,000 hours in Year 4. Dunedin buys equipment frequently and wants to print a depreciation schedule for each assets life. Review the worksheet called DEPREC that follows these requirements. Since some assets acquired are depreciated by straight-line, others by units of production, and others by double-declining balance, DEPREC shows all three methods. You are to use this worksheet to prepare depreciation schedules for the new machine.
- After discovering a new gold vein in the Colorado mountains, CTC Mining Corporation must decide whether to go ahead and develop the deposit. The most cost-effective method of mining gold is sulfuric acid extraction, a process that could result in environmental damage. Before proceeding with the extraction, CTC must spend 900,000 for new mining equipment and pay 165,000 for its installation. The mined gold will net the firm an estimated 350,000 each year for the 5-year life of the vein. CTCs cost of capital is 14%. For the purposes of this problem, assume that the cash inflows occur at the end of the year. a. What are the projects NPV and IRR? b. Should this project be undertaken if environmental impacts were not a consideration? c. How should environmental effects be considered when evaluating this or any other project? How might these concepts affect the decision in part b?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.