The Company purchased a mining site for $558,306.00 on July 1. The company expects to mine ore for the next 10 years and anticipates that a total of 94,754 tons will be recovered. The estimated residual value of the property is $40,849.00. During the first year the company extracted 6,676 tons of ore. What is the depletion expense for the first year?
Select the correct answer.
$36,458.02
$51,745.70
$39,336.08
$40,849.00
Correct option is: a. $36,458.02 | |||
Workings: | |||
Depletion Cost per unit | = | (Cost of the asset - Resale value) / Estimated number of units | |
= | ($558306 - $40849) / 94754 | ||
= | $ 5.46 | per ton | |
Depletion expense (First year) | = | Depletion Cost per unit X Number of units extracted | |
= | $5.31 X 6676 tons | ||
= | $ 36,458.02 |
The Company purchased a mining site for $558,306.00 on July 1. The company expects to mine...
Calculator Weber Company purchased a mining site for $544,924 on July 1. The company expects to mine ore for the next 10 years and anticipates that a total of 99,289 tons will be recovered. The estimated residual value of the property is $47, 340. During the first year, the company extracted 6,620 tons of ore. The depletion expense is
Salter Mining Company purchased the Northern Tier Mine for $68 million cash. The mine was estimated to contain 3.27 million tons of ore and to have a residual value of $1.2 million. During the first year of mining operations at the Northern Tier Mine, 80,000 tons of ore were mined, of which 14,000 tons were sold. a. Prepare a journal entry to record depletion during the year. b. Show how the Northern Tier Mine, and its accumulated depletion, would appear...
Salter Mining Company purchased the Northern Tier Mine for $13 million cash. The mine was estimated to contain 4.22 million tons of ore and to have a residual value of $2.2 million. During the first year of mining operations at the Northern Tier Mine, 65,000 tons of ore were mined, of which 12,000 tons were sold. a. Prepare a journal entry to record depletion during the year. b. Show how the Northern Tier Mine, and its accumulated depletion, would appear...
In 2018, the Marion Company purchased land containing a mineral mine for $1,640,000. Additional costs of $564,000 were incurred to develop the mine. Geologists estimated that 600,000 tons of ore would be extracted. After the ore is removed, the land will have a resale value of $104,000. To aid in the extraction, Marion built various structures and small storage buildings on the site at a cost of $252,000. These structures have a useful life of 10 years. The structures cannot...
PLEASE NOTE: THE ANSWER IS NOTE THAT 1,634,248 FOR PART A Salter Mining Company purchased the Northern Tier Mine for $68 million cash. The mine was estimated to contain 3.27 million tons of ore and to have a residual value of $1.2 million. During the first year of mining operations at the Northern Tier Mine, 80,000 tons of ore were mined, of which 14,000 tons were sold. a. Prepare a journal entry to record depletion during the year. b. Show...
In 2018, the Marion Company purchased land containing a mineral mine for $1,660,000. Additional costs of $723,000 were incurred to develop the mine. Geologists estimated that 700,000 tons of ore would be extracted. After the ore is removed, the land will have a resale value of $108,000. To aid in the extraction, Marion built various structures and small storage buildings on the site at a cost of $455,000. These structures have a useful life of 10 years. The structures cannot...
In 2021, the Marion Company purchased land containing a mineral mine for $1,740,000. Additional costs of $676,000 were incurred to develop the mine. Geologists estimated that 400,000 tons of ore would be extracted. After the ore is removed, the land will have a resale value of $116,000. To aid in the extraction, Marion built various structures and small storage buildings on the site at a cost of $184,000. These structures have a useful life of 10 years. The structures cannot...
In 2021, the Marion Company purchased land containing a mineral mine for $1,450,000. Additional costs of $547,000 were incurred to develop the mine. Geologists estimated that 370,000 tons of ore would be extracted. After the ore is removed, the land will have a resale value of $110,000. To aid in the extraction, Marion built various structures and small storage buildings on the site at a cost of $133,200. These structures have a useful life of 10 years. The structures cannot...
On April 17, 2018, the Loadstone Mining Company purchased the rights to a coal mine. The purchase price plus additional costs necessary to prepare the mine for extraction of the coal totaled $4,750,000. The company expects to extract 950,000 tons of coal during a four-year period. During 2018, 245,000 tons were extracted and sold immediately. Required: 1. Calculate depletion for 2018.
In 2021, the Marion Company purchased land containing a mineral mine for $2,050,000. Additional costs of $843,000 were incurred to develop the mine. Geologists estimated that 490,000 tons of ore would be extracted. After the ore is removed, the land will have a resale value of $100,000. To aid in the extraction, Marion built various structures and small storage buildings on the site at a cost of $205,800. These structures have a useful life of 10 years. The structures cannot...