FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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in 2024, the marion company purchased land containing a mineral mine for $1,500,000. Additional costs of $557,000 WERE INCURRED TO DEVELOP THE MINE. gEOLOGISTS ESTIMATED THAT 380,000 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 site at a cost of $138,700. These structures have a use full life of ten years. the structures cannot be moved and will be left on site. in addition the new equipment costing $83,800 was purchased and installed on the site. Marion does not plan to move equipment to another site, but estimates it can be sold at auction for $4000 after the mining project is completed.
in 2024, 48,000 tons of ore were extracted and sold. in 2025, the estimated total tons of ore in the mine was revised from 380,000 to 467500. during 2025, 78,000 tons were extracted, of which 58,000 tons were sold.
1. compute depletion and
2. compute book vale of mine, structures and equipment as of december 31st, 2025.
depletion of mine
depreciation of structures
depreciation of equipment
2024 and 2025
book value
mine
structures
equipment
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