Perez Company acquires an ore mine at a cost of $3,780,000. It incurs additional costs of $1,058,400 to access the mine, which is estimated to hold 2,700,000 tons of ore. 265,000 tons of ore are mined and sold the first year. The estimated value of the land after the ore is removed is $540,000. Calculate the depletion expense from the information given. 1. & 2. Prepare the entry to record the cost of the ore mine and year-end adjusting entry.
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Perez Company acquires an ore mine at a cost of $3,780,000. It incurs additional costs of $1,058,400 to access the mine, which is estimated to hold 2,700,000 tons of ore. 265,000 tons of ore are mined and sold the first year. The estimated value of the land after the ore is removed is $540,000. Calculate the depletion expense from the information given.
1. & 2. Prepare the entry to record the cost of the ore mine and year-end
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- Gimli Miners recently purchased the rights to a diamond mine. It is estimated that there are one million tons of ore within the mine. Gimli paid $23,100,000 for the rights and expects to harvest the ore over the next ten years. The following is the expected extraction for the next five years. Year 1: 50,000 tons Year 2: 90,000 tons Year 3: 100,000 tons Year 4: 110,000 tons Year 5: 130,000 tons Calculate the depletion expense for the next five years, and create the journal entry for year one.Underwoods Miners recently purchased the rights to a diamond mine. It is estimated that there are two million tons of ore within the mine. Underwoods paid $46,000,000 for the rights and expects to harvest the ore over the next fifteen years. The following is the expected extraction for the next five years. Year 1: 50,000 tons Year 2: 900,000 tons Year 3: 400,000 tons Year 4: 210,000 tons Year 5: 150,000 tons Calculate the depletion expense for the next five years and create the journal entry for year one.Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one it expects to use the truck for 26,000 miles. Calculate the annual depreciation expense.
- Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000 hours, the company expects to sell the asset for 150,000. What is the depreciation rate per hour based on activity?Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one the company expects the truck to be driven for 26,000 miles; in year two, 30,000 miles; and in year three, 40,000 miles. Consider how the purchase of the truck will impact Montellos depreciation expense each year and what the trucks book value will be each year after depreciation expense is recorded.Dunedin Drilling Company recently acquired a new machine at a cost of 350,000. The machine has an estimated useful life of four years or 100,000 hours, and a salvage value of 30,000. This machine will be used 30,000 hours during Year 1, 20,000 hours in Year 2, 40,000 hours in Year 3, and 10,000 hours in Year 4. With DEPREC5 still on the screen, click the Chart sheet tab. This chart shows the accumulated depreciation under all three depreciation methods. Identify below the depreciation method that each represents. Series 1 _____________________ Series 2 _____________________ Series 3 _____________________ When the assignment is complete, close the file without saving it again. Worksheet. The problem thus far has assumed that assets are depreciated a full year in the year acquired. Normally, depreciation begins in the month acquired. For example, an asset acquired at the beginning of April is depreciated for only nine months in the year of acquisition. Modify the DEPREC2 worksheet to include the month of acquisition as an additional item of input. To demonstrate proper handling of this factor on the depreciation schedule, modify the formulas for the first two years. Some of the formulas may not actually need to be revised. Do not modify the formulas for Years 3 through 8 and ignore the numbers shown in those years. Some will be incorrect as will be some of the totals. Preview the printout to make sure that the worksheet will print neatly on one page, and then print the worksheet. Save the completed file as DEPRECT. Hint: Insert the month in row 6 of the Data Section specifying the month by a number (e.g., April is the fourth month of the year). Redo the formulas for Years 1 and 2. For the units of production method, assume no change in the estimated hours for both years. Chart. Using the DEPREC5 file, prepare a line chart or XY chart that plots annual depreciation expense under all three depreciation methods. No Chart Data Table is needed; use the range B29 to E36 on the worksheet as a basis for preparing the chart if you prepare an XY chart. Use C29 to E36 if you prepare a line chart. Enter your name somewhere on the chart. Save the file again as DEPREC5. Print the chart.
- Perez Company acquires an ore mine at a cost of $3,640,000. It incurs additional costs of $1,019,200 to access the mine, which is estimated to hold 2,600,000 tons of ore. 260,000 tons of ore are mined and sold the first year. The estimated value of the land after the ore is removed is $520,000. Calculate the depletion expense from the information given. 1. & 2. Prepare the entry to record the cost of the ore mine and year-end adjusting entry. Complete this question by entering your answers in the tabs below. Depletion Expense General Journal Calculate the depletion expense from the information given. (Round "Depletion per unit" to 3 decimal places.) Cost Salvage Amount subject to depletion Total units of capacity Depletion per unit Units extracted and sold in period Depletion expense Complete this question by entering your answers in the tabs below. Depletion Expense…Perez Company acquires an ore mine at a cost of $2,940,000. It incurs additional costs of $823,200 to access the mine, which is estimated to hold 2,100,000 tons of ore. 235,000 tons of ore are mined and sold the first year. The estimated value of the land after the ore is removed is $420,000. Calculate the depletion expense from the information given. 1. & 2. Prepare the entry to record the cost of the ore mine and year-end adjusting entry. Complete this question by entering your answers in the tabs below. Depletion Expense Calculate the depletion expense from the information given. (Round "Depletion per unit" to 3 decimal places.) General Journal Cost Salvage Amount subject to depletion Total units of capacity Depletion per unit Units extracted and sold in period Depletion expensePerez Company acquires an ore mine at a cost of $3,360,000. It incurs additional costs of $940,800 to access the mine, which is estimated to hold 2,400,000 tons of ore. 250,000 tons of ore are mined and sold the first year. The estimated value of the land after the ore is removed is $480,000. Calculate the depletion expense from the information given. 1. & 2. Prepare the entry to record the cost of the ore mine and year-end adjusting entry. Complete this question by entering your answers in the tabs below. Depletion Expense General Journal X Answer is not complete. Calculate the depletion expense from the information given. Note: Round "Depletion per unit" to 3 decimal places. Cost Salvage Amount subject to depletion Total units of capacity Depletion per unit Units extracted and sold in period Depletion expense $ 4,300,800 (480,000) $ 2,400,000 1.592 250,000 Depletion Expense General Journal >
- Perez Company acquires an ore mine at a cost of $2,380,000. It incurs additional costs of $666,400 to access the mine, which is estimated to hold 1,700,000 tons of ore. 215,000 tons of ore are mined and sold the first year. The estimated value of the land after the ore is removed is $340,000. Calculate the depletion expense from the information given. record the cost of the o mine and year end adjusting entryBarton Corporation acquires a coal mine at a cost of $1,800,000. Intangible development costs total $360,000. After extraction has occurred, Barton must restore the property (estimated fair value of the obligation is $180,000), after which it can be sold for $210,000. Barton estimates that 5,000 tons of coal can be extracted. What is the amount of depletion per ton? a. $426 b. $384 c. $468 d. $360The Platinum Touch Mining Company paid $4,000,000 for a parcel of land, including the mining rights. In addition, the company spent $564,700 to prepare the site for mining operations. When mining is completed, it is estimated that the residual value of the asset will be $800,000. Scientists estimate that the site contains 150,000 ounces of platinum. A. What is the average depletion cost per ounce? B. If 12,200 ounces were mined in the first year of operation, what is the amount of the depletion cost?
