menu
bartleby
search
close search
Hit Return to see all results
Subscribe
Sign in

Business
AccountingIntermediate Accounting: Reporting And Analysis3rd Edition

close solutoin list
Chapter 11, Problem 13P
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

Solutions

Chapter
Section
Problem 1GI
Problem 2GI
Problem 3GI
Problem 4GI
Problem 5GI
Problem 6GI
Problem 7GI
Problem 8GI
Problem 9GI
Problem 10GI
Problem 11GI
Problem 12GI
Problem 13GI
Problem 14GI
Problem 15GI
Problem 16GI
Problem 17GI
Problem 18GI
Problem 19GI
Problem 20GI
Problem 21GI
Problem 22GI
Problem 23GI
Problem 1MC
Problem 2MC
Problem 3MC
Problem 4MC
Problem 5MC
Problem 6MC
Problem 7MC
Problem 8MC
Problem 9MC
Problem 10MC
Problem 1RE
Problem 2RE
Problem 3RE
Problem 4RE
Problem 5RE
Problem 6RE
Problem 7RE
Problem 8RE
Problem 9RE
Problem 10RE
Problem 11RE
Problem 12RE
Problem 13RE
Problem 14RE
Problem 1E
Problem 2E
Problem 3E
Problem 4E
Problem 5E
Problem 6E
Problem 7E
Problem 8E
Problem 9E
Problem 10E
Problem 11E
Problem 12E
Problem 13E
Problem 14E
Problem 15E
Problem 16E
Problem 17E
Problem 18E
Problem 19E
Problem 20E
Problem 1P
Problem 2P
Problem 3P
Problem 4P
Problem 5P
Problem 6P
Problem 7P
Problem 8P
Problem 9P
Problem 10P
Problem 11P
Problem 12P
Problem 13P
Problem 14P
Problem 15P
Problem 16P
Problem 17P
Problem 18P
Problem 19P
Problem 20P
Problem 21P
Problem 1C
Problem 2C
Problem 3C
Problem 4C
Problem 5C
Problem 6C
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
1 views

On July 1, 2019, Amplex Company purchased a coal mine for $2 million. The estimated capacity of the mine was 800,000 tons. During 2019, Amplex mines 10,000 tons of coal per month and sells 9,000 tons per month. The selling price is $30 per ton and production costs (excluding depletion and depreciation) are $8 per ton. At the end of the mine’s life, Amplex estimates that the present value of the cost to restore the land is $300,000, after which it can be sold for $100,000. Amplex also purchased some temporary housing for the miners at a cost of $170,000. The housing has an expected life of 10 years but is expected to be sold for $10,000 at the end of the mine’s life. The housing is depreciated using the activity method. Amplex uses the FIFO cost flow assumption and its discount rate is 10%.

Required:

  1. 1. Compute the company’s expenses included on the 2019 income statement.
  2. 2. Compute the cost of the company’s inventory at December 31, 2019.
  3. 3. In January 2020, a new estimate indicated that the capacity of the mine was only 500,000 tons at that time. Compute the company’s expenses included on the 2020 income statement if the company mines and sells 10,000 tons per month. Round the depletion rate to 3 decimal places.

1.

To determine

Calculate the total expenses that are included in the income statement of company A for 2019.

Explanation

Depreciation expense: Depreciation expense is a non-cash expense, which is recorded on the income statement reflecting the consumption of economic benefits of long-term asset on account of its wear and tear or obsolesces.

Depletion: Depletion is a process in which the cost of natural resources like oil reserves, mineral deposits, and timber tracts, is allocated equally over the extraction or harvesting period of the asset. When a resource is depleted, the value of resource is decreased and the value of extracted inventory obtained is increased. So, depletion is recorded on the balance sheet, and not on the income statement. But the Cost of Goods Sold expense is recorded when the extracted inventory is sold.

Calculate the amount of total expenses that would be included in the income statement of company A for 2019as follows:

Total expense =( Total expense of coal per ton ×Number of tons sold)+Accretion=($10.95 per tons (5) ×54,000 tons (4) )+$15,000 (3) =$606,300

Working note (1):

Calculate the depletion rate per ton.

Depleption rate = [(Cost−Residual value) +Present value]Estimated capacity of coal=($2,000,000−$100,000)+$300,000800,000 tons=$2.75 per ton

Working note (2):

Calculate the depreciation rate per ton.

Depreciation rate = Cost−Residual valueEstimated capacity of coal=($170,000−$10,000)800,000 tons=$0

2.

To determine

Calculate the cost of inventory of Company A for the year ended December 31, 2019.

3.

To determine

Calculate the total expense of Company A for 2020, and assume the new estimation of the company indicates that the capacity of the mine is 500,000 tons.

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution
arrow_back
Chapter 11,
Problem 12P
Chapter 11,
Problem 14P
arrow_forward

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Chapter 11 Solutions

Show all chapter solutions add
Ch-11 P-1GICh-11 P-2GICh-11 P-3GICh-11 P-4GICh-11 P-5GICh-11 P-6GICh-11 P-7GICh-11 P-8GICh-11 P-9GICh-11 P-10GI
Ch-11 P-11GICh-11 P-12GICh-11 P-13GICh-11 P-14GICh-11 P-15GICh-11 P-16GICh-11 P-17GICh-11 P-18GICh-11 P-19GICh-11 P-20GICh-11 P-21GICh-11 P-22GICh-11 P-23GICh-11 P-1MCCh-11 P-2MCCh-11 P-3MCCh-11 P-4MCCh-11 P-5MCCh-11 P-6MCCh-11 P-7MCCh-11 P-8MCCh-11 P-9MCCh-11 P-10MCCh-11 P-1RECh-11 P-2RECh-11 P-3RECh-11 P-4RECh-11 P-5RECh-11 P-6RECh-11 P-7RECh-11 P-8RECh-11 P-9RECh-11 P-10RECh-11 P-11RECh-11 P-12RECh-11 P-13RECh-11 P-14RECh-11 P-1ECh-11 P-2ECh-11 P-3ECh-11 P-4ECh-11 P-5ECh-11 P-6ECh-11 P-7ECh-11 P-8ECh-11 P-9ECh-11 P-10ECh-11 P-11ECh-11 P-12ECh-11 P-13ECh-11 P-14ECh-11 P-15ECh-11 P-16ECh-11 P-17ECh-11 P-18ECh-11 P-19ECh-11 P-20ECh-11 P-1PCh-11 P-2PCh-11 P-3PCh-11 P-4PCh-11 P-5PCh-11 P-6PCh-11 P-7PCh-11 P-8PCh-11 P-9PCh-11 P-10PCh-11 P-11PCh-11 P-12PCh-11 P-13PCh-11 P-14PCh-11 P-15PCh-11 P-16PCh-11 P-17PCh-11 P-18PCh-11 P-19PCh-11 P-20PCh-11 P-21PCh-11 P-1CCh-11 P-2CCh-11 P-3CCh-11 P-4CCh-11 P-5CCh-11 P-6C

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

When the correct numbers are used but are in the wrong order, the error is called a (a) transposition. (b) slid...

College Accounting, Chapters 1-27

Hardcase Luggage Shop is a small retail establishment located in a large shopping mall. This shop has implement...

Financial Accounting

Use the following information for Exercises 2-41 and 2-42: Grin Company manufactures digital cameras. In Januar...

Managerial Accounting: The Cornerstone of Business Decision-Making

Equivalent units of production The following information concerns production in the Baking Department for March...

Financial & Managerial Accounting

Entry for issuing materials Materials issued for the current month are as follow? Journalize the entry to recor...

Accounting

Which of the following statements is not true? a. Database systems have data independence; that is, the data an...

Accounting Information Systems

Weighted average cost method with perpetual inventory The beginning inventory for Dunne Co. and data on purchas...

Financial And Managerial Accounting

Why are closing entries required at the end of an accounting period?

Corporate Financial Accounting

LOCKBOX SYSTEM Fisher-Gardner Corporation (FGC) began operations 5 years ago as a small firm serving customers ...

Fundamentals of Financial Management (MindTap Course List)

Will the world ever run out of a nonrenewable resource? Explain.

Economics:

What, in your own words, does BR entail?

Accounting Information Systems

Governments may intervene in a market economy in order to a. protect property rights. b. correct a market failu...

Brief Principles of Macroeconomics (MindTap Course List)

(Government Revenue) What are the sources of government revenue in the United States? Which types of taxes are ...

ECON MICRO

Given a description of a companys marketing mix, classify the elements of the marketing mix and the category of...

Contemporary Marketing

Under what conditions is the production possibilities frontier linear rather than bowed out?

Essentials of Economics (MindTap Course List)

List three factors that can change the economy's potential output. What is the impact of shifts of the aggregat...

ECON MACRO

What is trade associations role in encouraging ethics?

Foundations of Business (MindTap Course List)

Respond to each statement here based on whether you Mostly Agree or Mostly Disagree With it. Mostly Disagree Mo...

Management, Loose-Leaf Version

Under what conditions is the production possibilities frontier linear rather than bowed out?

Principles of Microeconomics (MindTap Course List)

A case study in the chapter analyzed purchasing-power parity for several countries using the price of Big Macs....

Principles of Macroeconomics (MindTap Course List)

(Allocative and Distributive Effects) Why is society worse off under monopoly than under perfect competition, e...

ECON: MICRO4 (New, Engaging Titles from 4LTR Press)

Define signaling and screening and give an example of each.

Principles of Economics (MindTap Course List)

J.D. Power and Associates surveys new automobile owners to learn about the quality of recently purchased vehicl...

STATISTICS F/BUSINESS+ECONOMICS-TEXT

GROWTH RATES Sawyer Corporations 2015 sales were 5 million. Its 2010 sales were 2.5 million. a. At what rate ha...

Fundamentals of Financial Management, Concise Edition (MindTap Course List)

What might be some advantages and disadvantages to being let go remotely, if any? Why might it be a good idea t...

Essentials of Business Communication (MindTap Course List)

Explain cause-related marketing

MKTG 12:STUDENT ED.-TEXT

The following units of a particular item were available for sale during the calendar year: The firm uses the we...

Financial Accounting

Determine on which financial statement each account listed below is reported. Use the following abbreviations: ...

College Accounting (Book Only): A Career Approach

Analysis of statement of cash flows Dillip Lachgar is the president and majority shareholder of Argon Inc., a s...

Financial & Managerial Accounting

Income statement items Based on the data presented in Exercise 1-16, identify those items that would appear on ...

Accounting (Text Only)

The owner of a motorcycle shop allows his two sons to take motorcycles home to try them out on different types ...

College Accounting (Book Only): A Career Approach

CALCULATING INTEREST Using 360 days as the denominator, calculate interest for the following notes using the fo...

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

The Bureau of Transportation Statistics Omnibus Household Survey is conducted annually and serves as an informa...

Statistics for Business & Economics, Revised (MindTap Course List)

What are some differences in the analysis for a replacement project versus that for a new expansion project?

Fundamentals of Financial Management (MindTap Course List)

Which of the following individuals would economists consider unemployed? a. Sam looked for work for several wee...

Exploring Economics

Popeyes income declines, and as a result, he buys more spinach. Is spinach an inferior or a normal good? What h...

Principles of Macroeconomics (MindTap Course List)

What is the purpose of the strategic IT plan?

Pkg Acc Infor Systems MS VISIO CD

CASH CONVERSION CYCLE Primrose Corp has 15 million of sales, 2 million of inventories, S3 million of receivable...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

How does a policy of rotating clerical employees from job to job aid in strengthening the control procedures wi...

Survey of Accounting (Accounting I)

Bank reconciliation The following bank reconciliation was prepared as of June 30, 20Y7: Poway Co. Bank Reconcil...

Corporate Financial Accounting

Damerly Company (a Utah employer) wants to give a holiday bonus check of 250 to each employee. Since it wants t...

PAYROLL ACCT.,2019 ED.(LL)-TEXT

What are the five components of national income?

Macroeconomics

Managing Supplier Quality: Integrated Devices Bill Edwards is a quality engineer assigned to the Injected Moldi...

Purchasing and Supply Chain Management

Low-income families consume proportionately more of which of the following kinds of goods? a. Luxury goods b. S...

Economics For Today

James lives in a rent-controlled apartment and has for the past few weeks been trying to get the supervisor to ...

Microeconomics

Misterio Company uses a standard costing system. During the past quarter, the following variances were computed...

Cornerstones of Cost Management (Cornerstones Series)

The RedBrand Company produces a tomato product at three plants. This product can be shipped directly to the com...

Practical Management Science

Explain why subsidizing the purchase of good X could end up raising the price of good X.

Economics (MindTap Course List)

In each of the sentences below, choose the correct word in parentheses. Conversation skills and good listening ...

Bcom

bartleby
© bartleby 2019