At the beginning of 2020, Aristotle Company acquired a mine for $970,000. Of this amount, $100,000 was ascribed to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists have indicated that approximately 12,000,000 units of ore appear to be in the mine. Aristotle incurred $170,000 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 $40,000. During 2020, 2,500,000 units of ore were extracted and 2,100,000 of these units were sold. Instructions Compute the following. a. The total amount of depletion for 2020. b. The amount that is charged as an expense for 2020 for the cost of the minerals sold during 2020.

At the beginning of 2020, Aristotle Company acquired a mine for $970,000. Of this amount, $100,000 was ascribed to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists have indicated that approximately 12,000,000 units of ore appear to be in the mine. Aristotle incurred $170,000 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 $40,000. During 2020, 2,500,000 units of ore were extracted and 2,100,000 of these units were sold. Instructions Compute the following. a. The total amount of depletion for 2020. b. The amount that is charged as an expense for 2020 for the cost of the minerals sold during 2020.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11EB: The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining...

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The following intangible assets were purchased by Goldstein Corporation: A. A patent with a remaining legal life of twelve years is bought, and Goldstein expects to be able to use it for seven years. B. A copyright with a remaining life of thirty years is purchased, and Goldstein expects to be able to use it for ten years. For each of these situations, determine the useful life over which Goldstein will amortize the intangible assets.
The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining legal life of twelve years is bought, and Hanna expects to be able to use it for six years. It is purchased at a cost of $48,000. B. A copyright with a remaining life of thirty years is purchased, and Hanna expects to be able to use it for ten years. It is purchased for $70,000. Determine the annual amortization amount for each intangible asset.
At the beginning of 2020, Metlock Company acquired a mine for $1,842,600. Of this amount, $113,000 was ascribed to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists have indicated that approximately 11,570,000 units of ore appear to be in the mine. Metlock incurred $192,100 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 $45,200. During 2020, 2,702,000 units of ore were extracted and 2,293,000 of these units were sold. Compute the following. (a) The total amount of depletion for 2020. (Round per unit answer to 2 decimal places, e.g. 0.45 for computational purpose and final answer to 0 decimal places, eg. 45,892.) Depletion for 2020 2$ eTextbook and Media
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the beginning of 2019, Callaway Company acquired a mine for $850,000. Of this amount, $100,000 was ascribed to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists have indicated that approximately 12,000,000 units of the ore appear to be in the mine. Callaway incurred $170,000 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 $40,000. During 2019, 2,500,000 units of ore were extracted and 2,200,000 of these units were sold. Instructions Compute the following. a. The total amount of depletion for 2019. b. The amount that is charged as an expense for 2019 for the cost of the minerals sold during 2019
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In January 2020, Mark Company purchased a mineral mine for P36,000,000 with removable ore estimated by geological survey at 4,000,000 tons. The property has an estimated value of P3,600,000 after the ore has been extracted. The entity incurred P10,800,000 of development cost preparing the property for the extraction of ore. The entity is required to restore the property to the original condition at an estimated cost of P2,500,000. The present value of the estimated restoration cost is P1,800,000. During 2020, 400,000 tons were removed, and 300,000 tons were sold. For the year ended December 31, 2020, what amount of depletion should be included in cost of goods sold? 3,375,000 O 4,570,000 3,427,500 O 4,500,000
the beginning of 2019, Callaway Company acquired a mine for $850,000. Of this amount, $100,000 was ascribed to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists have indicated that approximately 12,000,000 units of the ore appear to be in the mine. Callaway incurred $170,000 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 $40,000. During 2019, 2,500,000 units of ore were extracted and 2,200,000 of these units were sold. Find the following: a.) The total amount of depletion for 2019. b.)The amount that is charged as an expense for 2019 for the cost of the minerals sold during 2019.
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