On July 4, 2020, ZY 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?
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A: Depreciation , amortization , depletion all means the fall in value of assets due to one reason or…
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A: The cost of extracting natural resources from the earth, such as wood, minerals, and oil, is…
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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: 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…
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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…
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A: A revaluation is an upward adjustment of a country's official exchange rate compared to a…
Q: On January 2, 2019, Whistler Company purchased land for $480,000, from which it is estimated that…
A: Depletion refers to the measure which is linked with the depletion amount of the extraction of the…
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: 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 1,2021, Phantom Corporation purchased the rights to a mine for a total purchase price of…
A: The depreciation expense is charged on fixed assets as reduction in the value of fixed assets with…
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 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: On January 2, 2019, Whistler Company purchased land for $450,000, from which it is estimated that…
A: 1) Calculation of Depletion cost per Ton:
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: On June 1, 2021, ABC Company purchased rights to a mine for P30,000,000, of which, P3,000,000 was…
A: Annual Depreciation (straight line method) = (Cost of the assets - Residual value) / Expected life…
Q: On July 4, 2020, Wyoming Mining Company purchased the mineral rights to a granite deposit for…
A: Assets used over the years will face a depreciation each year which refers to the reduction in the…
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.
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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: 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 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 January 1, 2019, Blossom Corporation acquired a small mine for $20 million along with equipment…
A: Depreciation is the reduction in the worth of fixed tangible asset due to obsolescence or over-use…
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 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: 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: 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 January 1, 2020, Hilary Company purchased a mineral mine for P26,400,000 with removable ore…
A: Depreciation , amortization , depletion all means the fall in value of assets due to one reason or…
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…
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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: 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: During 2021, Bondoc Corporation acquired a mineral mine for P900,000 of which P150,000 was ascribed…
A: Depletion of mine will be on the basis of amount of mineral extracted during the period. Accumulated…
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: 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…
On July 4, 2020, ZY 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?
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- 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?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.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.
- 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.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.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.
- 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.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.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?
- At the beginning of 2020, Holden Companys controller asked you to prepare correcting entries for the following three situations: 1. Machine X was purchased for 100,000 on January 1, 2015. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 45,000. The estimated residual value remains at 10,000, but the service life is now estimated to be 1 year longer than originally estimated. 2. Machine Y was purchased for 40,000 on January 1, 2018. It had an estimated residual value of 4,000 and an estimated service life of 8 years. It has been depreciated under the sum-of-the-years-digits method for 2 years. Now, the company has decided to change to the straight-line method. 3. Machine Z was purchased for 80,000 on January 1, 2019. Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value is 8,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry for each situation to record the depreciation for 2020. Ignore income taxes.Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the assets life, and create the journal entry for year five.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.
