Question

Dominum Corp. is a mining company that mines, produces, and markets teledine, a common mineral substance. The mineral is mined and produced in one large batch per year, as the mine is accessible only for a brief period in the summer due to severe weather conditions at the mine site. Dominum has an advance purchase contract with one customer that takes all of Dominum's output each year. The agreement allows the customer to return defective product for up to 60 days from the date of delivery Transactions in 20X6 were: 30 August 30 September 15 October 186,000 tonnes of teledine ore removed from mine, at a cost of $4,300,000. All of the ore refined to 115,000 tonnes of teledine, at a cost of $640,000. A. deposit is received from the customer for $1,350,000 (10% of the contract amount). All of the teledine delivered to the customer, total contract price, $13,500,000. At this point, sex of the contract amount is received. Dominum estimates, from historical experience, that 7% of the goods might be returned. Five percent of the teledine is returned for full credit; ore had been improperly refined and the teledine was unusable; customer given full credit for $675,000 and the unusable teledine scrapped. No other returns are anticipated. Customer fully paid the final amount owing. 25 November 30 November

Answer 1

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credit Date 30 Aug Debit 4300 OUD Lo Pareticular Depletion Alc o r To Accumulated Dep. Ale (To laboro tones of toledine. Lore removed from mine) 4800 000 G40OVO 640 OUD 30 sep. ore refined 00 To Cash To are refined of toledine) 1350OVO 30 sep. Cash Ale To Deposit of Customer Peenge deprost croceived ) 11350000 sact 5400 vs 54 Ovo Cash Alc To Account receivable (Bang Sol. of amount received) 67500d 678 oud 25 HON telodeine scrapped AIC or To customer (Benig slapped wet wined by customer) BONOV Cash Alc - or To Customer To customer paid full amount) 6075000 607sovo

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