Answer : $ 419
Calculations:
Cost of coal Mines | $1,750,000 | ||
Intangible costs | $358,000 | ||
Fair value of restoration cost | $190,000 | ||
Total cost of Coal mines | $2,298,000 | ||
Residual Value | $202,000 | ||
Depletion per unit | (Total cost of coal mines-residual value)/expected ton of production | ||
(2298000-202000)/5000 | |||
$419 |
Sheridan Company acquires a coal mine at a cost of $1750000. Intangible development costs total $358000....
Vaughn Manufacturing acquires a coal mine at a cost of $1870000. Intangible development costs total $354000. After extraction has occurred, Vaughn must restore the property (estimated fair value of the obligation is $188000), after which it can be sold for $220000. Vaughn estimates that 6000 tons of coal can be extracted. What is the amount of depletion per ton? $312 $402 $365 $330
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Question 2 Wildhorse Corporation acquires a coal mine at a cost of $472,000. Intangible development costs total $118,000. After extraction has occurred, Wildhorse must restore the property (estimated fair value of the obligation is $94,400), after which it can be sold for $188,800. Wildhorse estimates that 4,720 tons of coal can be extracted. If 826 tons are extracted the first year, prepare the journal entry to record depletion. (If no entry is required, select "No entry" for the account titles...
explanation very appreciated Sunland Corporation acquires a coal mine at a cost of $452,000. Intangible development costs total $113,000. After extraction has occurred, Sunland must restore the property (estimated fair value of the obligation is $90,400), after which it can be sold for $180,800. Sunland estimates that 4,520 tons of coal can be extracted. If 791 tons are extracted the first year, prepare the journal entry to record depletion. (If no entry is required, select "No entry" for the account...
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