Question

Oppur computations. Points wil ve uluu tell you HLUT 1. Mendenhall Corporation denhall Corporation constructed a building at a cost, excluding capitalized interest, of 000,000. Average accumulated expenditures were $4,000,000, actual interest was $600,000. and 0,000, and avoidable interest was $300.000. If the salvage value is $800,000, and the selul life is 40 years, what is the depreciation expense for the first full year using the straight-line method? (1 point) 4. Percy Resources Company acquired a tract of land containing an extractable natural resource. Percy is required by its purchase contract to restore the land to a condition suitable for recreational use after it has extracted the natural resource, Geological surveys estimate ecoverable reserves will be 2,000,000 tons, and that the land will have a value of $1,200,000 after restoration. Relevant cost information follows: Land Estimated restoration costs $9,000,000 1,800,000 If Percy maintains no inventories of extracted material, what should be the charge to depletion expense per ton of extracted material? (1 point)

Answer 1

1

	$
Cost of building	10000000
Avoidable interest	300000
salvage value	-800000
	9500000
Useful life	40 years
Depreciation expense	237500

(2)

if percy maintains no inventories of extract material, what should be the charge of depletion expense per ton of extracted material

Land	9000000
Estimated restoration costs	1800000
Land value after restoration	-1200000
	9600000
Recoverable reserves	2000000
Depletion expense per ton	4.8