Joe, Inc. acquires a copper mine at a cost of $1,000,000 in 2010. Intangible development costs are $240,000 and the cost of tangible equipment is $60,000. After extraction has occurred, Joe, Inc. must restore the property. The estimated fair value of the restoration cost is $40,000. The residual value of the copper mine is $100,000. It is estimated that 5,000 tons of copper can be extracted. In the year of acquisition, 2,100 tons were extracted and 500 tons were sold. How much cost of goods sold (depletion expense) should be recognized in 2010? What is ending inventory in 2010? What is the ending balance in the Copper Mine account?
Answer sheet says: COGS: 118,00, Ending Inventory: 377.600, Mine: 784,400
Please explain.
Joe, Inc. acquires a copper mine at a cost of $1,000,000 in 2010. Intangible development costs...
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
Sheridan Company acquires a coal mine at a cost of $1750000. Intangible development costs total $358000. After extraction has occurred. Sheridan must restore the property estimated fair value of the obligation is $190000), after which it can be sold for $202000. Sheridan estimates that 5000 tons of coal can be extracted. What is the amount of depletion per ton? O $160 O $384 O $350 O $419
Skysong Corporation acquires a coal mine at a cost of $424,000. Intangible development costs total $106,000. After extraction has occurred, Skysong must restore the property (estimated fair value of the obligation is $84,800), after which it can be sold for $169,600. Skysong estimates that 4,240 tons of coal can be extracted. If 742 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 and enter...
Coronado Corporation acquires a coal mine at a cost of $448,000. Intangible development costs total $112,000. After extraction has occurred, Coronado must restore the property (estimated fair value of the obligation is $89,600), after which it can be sold for $179,200. Coronado estimates that 4,480 tons of coal can be extracted. If 784 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 and enter...
Cullumber Corporation acquires a coal mine at a cost of
$424,000. Intangible development costs total $106,000. After
extraction has occurred, Cullumber must restore the property
(estimated fair value of the obligation is $84,800), after which it
can be sold for $169,600. Cullumber estimates that 4,240 tons of
coal can be extracted.
If 742 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 and enter...
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...
Marigold Corp. acquires a coal mine at a cost of $1790000. Intangible development costs total $358000. After extraction has occurred, Marigold must restore the property (estimated fair value of the obligation is $188000), after which it can be sold for $216000. Marigold Imates that 7000 tons of coal can be extracted. What is the amount of depletion per ton? $303 $256 $268 $334 Current Attempt in Progress On January 1, 2017, Oriole Company purchased a new machine for $4220000. The...
Perez Company acquires an ore mine at a cost of $3,080,000. It incurs additional costs of $862,400 to access the mine, which is estimated to hold 2,200,000 tons of ore. 240,000 tons of ore are mined and sold the first year. The estimated value of the land after the ore is removed is $440,000. Calculate the depletion expense from the information given. Cost Salvage Amount Subject to depletion Total units of capacity Depletion per unit Units extracted and sold in...
Jackpot Mining Company operates a copper mine in central Montana. The company paid $1,000,000 in 2018 for the mining site and spent an additional $600,000 to prepare the mine for extraction of the copper. After the copper is extracted in approximately four years, the company is required to restore the land to its original condition, including repaving of roads and replacing a greenbelt. The company has provided the following three cash flow possibilities for the restoration costs (FV of $1....