(b)Also compute the depreciation and depletion for the first year assuming actual production of 5,400 tons. Nothing occurred duringthe year to cause the company engineers to change their estimates of either the mineral resources or the life of the structures andequipment. (Round per unit answers to 2 decimal places, e.g. 0.45 for computational purposes and final answers to O decimal places, e.g.45,892.)Depletion$Depreciation $ Marigold Mining Company has purchased a tract of mineral land for $972,000. It is estimated that this tract will yield 129,600 tons ofore with sufficient mineral content to make mining and processing profitable. It is further estimated that 6,480 tons of ore will bemined the first and last year and 12,960 tons every year in between. (Assume 11 years of mining operations.) The land will have asalvage value of $32,400.The company builds necessary structures and sheds on the site at a cost of $38,880. It is estimated that these structures canserve 15 years but, because they must be dismantled if they are to be moved, they have no salvage value. The company does not intendto use the buildings elsewhere. Mining machinery installed at the mine was purchased secondhand at a cost of $64,800. Thismachinery cost the former owner $162,000 and was 50% depreciated when purchased. Marigold Mining estimates that about half ofthis machinery will still be useful when the present mineral resources have been exhausted, but that dismantling and removal costswill just about offset its value at that time. The company does not intend to use the machinery elsewhere. The remaining machinerywill last until about one-half the present estimated mineral ore has been removed and will then be worthless. Cost is to be allocatedequally between these two classes of machinery.(a)Your answer is correct.

Name: (b)Also compute the depreciation and depletion for the first year ass
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: (b)Also compute the depreciation and depletion for the first year assuming actual production of 5,400 tons. Nothing occurred duringthe year to cause the company engineers to change their estimates of either the mineral resources or the life of the s

Two accounting terms used to describe the decline in asset value over time are depletion and…

Business

Accounting

Also compute the depreciation and depletion for the first year assuming actual production of 5,400 tons. Nothing occurred during the year to cause the company engineers to change their estimates of either the mineral resources or the life of the structures and equipment. (Round per unit answers to 2 decimal places, e.g. 0.45 for computational purposes and final answers to O decimal places, e.g. 45,892.) Depletion Depreciation +A $ +A

Also compute the depreciation and depletion for the first year assuming actual production of 5,400 tons. Nothing occurred during the year to cause the company engineers to change their estimates of either the mineral resources or the life of the structures and equipment. (Round per unit answers to 2 decimal places, e.g. 0.45 for computational purposes and final answers to O decimal places, e.g. 45,892.) Depletion Depreciation +A $ +A

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Equipment with a cost of $450,000 has an estimated salvage value of $30,000 and an estimated lifeof 4 years or 10,000 hours. It is to be depreciated by the declining balance method (double). What is theamount of depreciation for the first full year, during which the equipment was used 2,700 hours?
A machine with a cost of $68,856 has an estimated residual value of $5,301 and an estimated life of 3 years or 15,143 hours. It is to be depreciated by the units-of-activity method. What is the amount of depreciation for the second full year, during which the machine was used 4,595 hours? Do not round your intermediate calculations. a. $21,185.00 b. $42,370.00 c. $19,285.16 d. $20,893.70
Use the following information for the Quick Studies below. (Algo) Skip to question [The following information applies to the questions displayed below.]Equipment costing $60,000 with a 4-year useful life and an estimated $10,000 salvage value is acquired and started operating on January 1. The equipment is estimated to produce 5,000 units of product during its life. It produced 750 units in the first year. QS 8-8 (Algo) Recording depreciation journal entries LO P1 Record the journal entries for equipment depreciation for the first year under straight-line, units-of-production, and double-declining-balance.
Pharoah Company purchased for $4,543,000 a mine that is estimated to have 45,430,000 tons of ore and no salvage value. In the first year, 14,040,000 tons of ore are extracted. (a1) Calculate depletion cost per unit. (Round answer to 2 decimal places, e.g. 0.50.) Depletion cost per unit $ per ton Save for Later (a2) The parts of this question must be completed in order. This part will be available when you complete the part above.
An asset for drilling was purchased and placed in service by a petroleum production company. Its cost basis is $60,000 and it has an estimated MV of $12,000 at the end of an estimated useful life of 14 years. Compute the accumulated depreciation in the third year and the BV at the end of 5th year of life by each of these methods at the rate of 9%: b. The DB Method (Declining Balance Method)- Provide the complete manual solution (not excel or tables) and cash flow diagram
A machine with a cost of $58,300.00 has an estimated residual value of $4,902.00 and an estimated life of 5 years or 17,053 hours. What is the amount of depreciation for the second full year, using the double declining-balance method? Select the correct answer. $23,320.00 $13,992.00 $21,359.20 $11,660.00
A machine with a cost of $120,000 has an estimated residual value of $15,000 and an estimated life of five years or 15,000 hours. It is to be depreciated by the units-of-activity method. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours? a. $5,000 b. $35,000 c. $21,000 d. $45,000 2. Equipment with a cost of $220,000 has an estimated residual value of $30,000 and an estimated life of 10 years or 19,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 2,100 hours? a. $19,000 b. $21,000 c. $22,000 d. $30,000 3. A machine with a cost of $75,000 has an estimated residual value of $5,000 and an estimated life of four years or 18,000 hours. What is the amount of depreciation for the second full year, using the double-declining-balance method? a. $17,500 b. $37,500 c. $18,750 d. $16,667
A machine with a cost of $50,000 has an estimated residual value of $5,000 and an estimated useful life of 10 years. What is the amount of annual depreciation computed by the straight-line method?
Monty Corp. purchased for $5,977,200 a mine that is estimated to have 49,810,000 tons of ore and no salvage value. In the first year, 12,090,000 tons of ore are extracted. (a1) × Your answer is incorrect. Calculate depletion cost per unit. (Round answer to 2 decimal places, e.g. 0.50.) Depletion cost per unit $ eTextbook and Media 0.22 per ton