CengageNOWv2, 1 term Printed Access Card for Hoffman/Young/Raabe/Maloney/Nellen's South-Western Federal Taxation 2018: Individual Income Taxes, 41st
41st Edition
ISBN: 9781337389518
Author: William H. Hoffman, James C. Young, William A. Raabe, David M. Maloney, Annette Nellen
Publisher: Cengage Learning
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Chapter 8, Problem 29CE
To determine
Determine P’s cost depletion for 2018.
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On January 1,2019, Flora Inc. purchased natural resources for P36,000,000. The company expects the resources to produce 1,200,000 units of products.
How much is the depletion expense for 2020 if the company mined and sold 260,000 units?
O P8,400,000
OP8,000,000
O P7,800,000
O P8,200,000
8. On January 1, 2018, Stefan company purchased a mining site that will have to be restored to certain specifications when the mining production ceases. The cost of the mining site is 6,000,000 and the restoration cost is expected to be 1,500,000. It is estimated that the mine will continue in operation for 10 years. The appropriate discount rate is 8%. The present value of 1 at 8% for 10 periods is 0.4632. On December 31, 2027, the entity contracted with another entity for the restoration of the mining site in accordance with specifications at a cost of 1,350,000. How much is the decommissioning liability on January 1, 2018?
3. On January 2, 2020, the Wally Company purchased land for P 450,000, from which it is
estimated that 400,000 tons of ore could be extracted. It estimates that it will cost P 80,000
to restore the land, after which it could be sold for P 30,000. During 2020, the company
mined 80,000 tons and sold 50,000 tons. During 2021, the company mined 100,000 tons
and sold 120,000. At the beginning of 2022, the company spent additional P 100,000,
which increased the reserves by 60,000 tons. In 2022, the company mined 140,000tons
and sold 130,000 tons. The company uses a FIFO cost flow assumption.
Required:
a. Calculate the depletion included in the income statement and ending inventory for 2020,
2021 and 2022.
Chapter 8 Solutions
CengageNOWv2, 1 term Printed Access Card for Hoffman/Young/Raabe/Maloney/Nellen's South-Western Federal Taxation 2018: Individual Income Taxes, 41st
Ch. 8 - Prob. 1DQCh. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - Prob. 4DQCh. 8 - Prob. 5DQCh. 8 - Prob. 6DQCh. 8 - Prob. 7DQCh. 8 - LO.2 Robert purchased and placed in service...Ch. 8 - LO.2 Jim owns a very large ranch. A large part of...Ch. 8 - Prob. 10DQ
Ch. 8 - Prob. 12DQCh. 8 - Discuss the definition of business income as it is...Ch. 8 - Prob. 14DQCh. 8 - Prob. 15DQCh. 8 - Prob. 16DQCh. 8 - Prob. 17DQCh. 8 - Prob. 18DQCh. 8 - Prob. 19DQCh. 8 - Prob. 20DQCh. 8 - Prob. 21CECh. 8 - Prob. 22CECh. 8 - Prob. 23CECh. 8 - Prob. 24CECh. 8 - Prob. 25CECh. 8 - Prob. 26CECh. 8 - Prob. 27CECh. 8 - Prob. 28CECh. 8 - Prob. 29CECh. 8 - Prob. 30CECh. 8 - Prob. 31PCh. 8 - Prob. 32PCh. 8 - Prob. 33PCh. 8 - Prob. 34PCh. 8 - Prob. 35PCh. 8 - Prob. 36PCh. 8 - Prob. 37PCh. 8 - Prob. 38PCh. 8 - Prob. 39PCh. 8 - Prob. 40PCh. 8 - Prob. 41PCh. 8 - Prob. 42PCh. 8 - Prob. 43PCh. 8 - Prob. 44PCh. 8 - Prob. 45PCh. 8 - Prob. 46PCh. 8 - Prob. 47PCh. 8 - Prob. 48PCh. 8 - Prob. 49PCh. 8 - Prob. 50PCh. 8 - Prob. 51PCh. 8 - LO.2, 5, 9 Jamie purchased 100,000 of new office...Ch. 8 - Prob. 53PCh. 8 - Prob. 54PCh. 8 - Prob. 55PCh. 8 - Prob. 56PCh. 8 - Prob. 57CPCh. 8 - Prob. 58CPCh. 8 - Prob. 1RPCh. 8 - Prob. 2RPCh. 8 - Prob. 3RPCh. 8 - Michael Sima, a sole proprietor craftsman,...Ch. 8 - Cox Construction, a company in its 10th year of...Ch. 8 - Stem Corp. bought a machine in February of year 7...Ch. 8 - Prob. 4CPACh. 8 - Data, Inc., purchased and placed in service a...Ch. 8 - Data, Inc., purchased and placed in service 5,000...Ch. 8 - Which statement below is correct? a. Real property...
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