Question

Send to Gradebook < Prev Next > Question 10 View Policies Current Attempt in Progress At the beginning of 2020, Bridgeport Company acquired a mine for $2,398,400. Of this amount, $116,000 was ascribed to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists have indicated that approximately 12,630,000 units of ore appear to be in the mine. Bridgeport incurred $197,200 of development costs associated with this mine prior to any extraction of minerals. It also determined that the fair value of its obligation to prepare the land for an alternative use when all of the mineral has been removed was $46,400. During 2020, 2,350,000 units of ore were extracted and 1,943,000 of these units were sold. Compute the following. The total amount of depletion for 2020. (Round per unit answer to 2 decimal places, e.g. 0.45 for computational purpose and final answer to O decimal places, e.g. 45,892.) Depletion for 2020 $ e Textbook and Media The amount that is charged as an expense for 2020 for the cost of the minerals sold during 2020.(Round per unit answer to 2 decimal places, e.g. 0.45 for computational purpose and final answer to 0 decimal places, e.g. 45,892.) Amount that is charged as an expense for 2020 $ e Textbook and Media Attempts: 0 of 10 used Save for Later Submit Answer

Answer 1

1) The total of depletion for 2020. Depletion for 2020 $4,700,000 Workings: Depletion per unit = (Mine acquiring cost + Development cost + Fair value of land - Land value) / Ore appear to be in the mine = ($2,398.400 + $197.200+ $46,400 - $116,000) / 12,630,000 units = $25,26,000 / 12.63.000 units $2.00 The total amount of depletion for 2020 = 2,350.000 units * $2.00 depletion per unit = $4,700,000 2) The amount that is charged as an expense for 2020 for the cost of the minerals sold during 2020: Amount that is charged as an expense for 2020 = 1,943,000 units * $2.00 depletion per unit = $3,886,000