FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:2. Complete the natural resources section of the balance sheet on December 31, 2019, 2020, and 2021, assuming that an accumulated depletion account is used.
Whistler Company
Balance Sheet (partial)
December 31, 2019 - 2021
December 31, 2019
Mineral ore resources
Less: Accumulated depletion
December 31, 2020
Mineral ore resources
Less: Accumulated depletion
December 31, 2021
Mineral ore resources
Less: Accumulated depletion
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3. Assume Whistler's discount rate was 9%. What is the balance in the asset retirement obligation at 2019, 2020, and 2021?
Whistler Company
Asset retirement obligation
2019 - 2021
December 31, 2019
December 31, 2020
December 31, 2021
Transcribed Image Text:Depletion
On January 2, 2019, Whistler Company purchased land for $410,000, from which it is estimated that 370,000 tons of ore could be extracted. It estimates that the present value of the cost necessary to restore the land is $52,000, after which it could be sold for
$26,000.
During 2019, Whistler mined 75,000 tons and sold 56,000 tons. During 2020, Whistler mined 98,000 tons and sold 99,000 tons. At the beginning of 2021, Whistler spent an additional $110,000, which increased the reserves by 70,000 tons. In 2021, Whistler
mined 148,000 tons and sold 142,000 tons. Whistler uses a FIFO cost flow assumption.
Required:
If required, round the depletion rate to the nearest cent and round the final answers to the nearest dollar.
1. Calculate the depletion included in the income statement and ending inventory for 2019, 2020, and 2021.
2019
Depletion deducted from income
66,080
Depletion included in inventory
2020 Depletion deducted from income
116.820
Depletion included in inventory
2021
Depletion deducted from income
Depletion included in inventory
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2. Complete the natural resources section of the balance sheet on December 31, 2019, 2020, and 2021, assuming that an accumulated depletion account is used.
Whistler Company
Balance Sheet (partial)
December 31, 2019 - 2021
December 31, 2019
Mineral ore resources
Less: Accumulated depletion
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