College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Chapter 18, Problem 6SEB
1.
To determine
Prepare
2.
To determine
Prepare journal entry to record depletion expense.
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Depletion: Calculating and Journalizing
Mineral Works Co. acquired a salt mine at a cost of $1,925,000, with no expected salvage value. The estimated number of units available for production from the mine is 3,500,000 tons.
a. During the first year, 220,000 tons are mined and sold.
b. During the second year, 290,000 tons are mined and sold.
Required:
1. Calculate the amount of depletion expense for both years.
Year 1
Year 2
2. Prepare general journal entries for depletion expense.
Page: 1
DOC. POST.
DATE
ACCOUNT TITLE
DEBIT CREDIT
NO.
REF.
1 Year 1
1
2
3
3
4 Year 2
4
5
Depletion: Calculating and Journalizing
Mineral Works Co. acquired a salt mine at a cost of $1,700,000, with no expected
salvage value. The estimated number of units available for production from the mine is
3,400,000 tons.
a. During the first year, 200,000 tons are mined and sold.
b. During the second year, 600,000 tons are mined and sold.
Required:
1. Calculate the amount of depletion expense for both years.
Year 1
Year 2
2. Prepare general journal entries for depletion expense.
Page: 1
DOC. POST.
NO. REF.
DATE ACCOUNT TITLE
DEBIT CREDIT
1 Year 1
2
3
3
4 Year 2
4
5
6
6
Hidden Hollow Mining Co. acquired mineral rights for $42,500,000. The mineral deposit is estimated at 50,000,000 tons. During the current year, 11,500,000 tons were mined and sold.
a. Determine the depletion rate. If required, round your answer to two decimal places.$fill in the blank 91e68b00e031f88_1 per ton
b. Determine the amount of depletion expense for the current year.$fill in the blank 91e68b00e031f88_2
c. Journalize the adjusting entry on December 31 to recognize the depletion expense. If an amount box does not require an entry, leave it blank.
Dec. 31
fill in the blank 346c5df8f020fe0_2
fill in the blank 346c5df8f020fe0_3
fill in the blank 346c5df8f020fe0_5
fill in the blank 346c5df8f020fe0_6
Chapter 18 Solutions
College Accounting, Chapters 1-27
Ch. 18 - Prob. 1TFCh. 18 - Prob. 2TFCh. 18 - Depreciation is a process of asset valuation; that...Ch. 18 - The straight-line method of depreciation allocates...Ch. 18 - Prob. 5TFCh. 18 - Prob. 1MCCh. 18 - Prob. 2MCCh. 18 - Prob. 3MCCh. 18 - Prob. 4MCCh. 18 - Prob. 5MC
Ch. 18 - The following costs were incurred to purchase a...Ch. 18 - Prob. 2CECh. 18 - A machine costing 350,000 has a salvage value of...Ch. 18 - Grandorf Company replaced the engine in a truck...Ch. 18 - Prepare journal entries for the following...Ch. 18 - Prob. 6CECh. 18 - Prob. 7CECh. 18 - Prob. 1RQCh. 18 - Prob. 2RQCh. 18 - Prob. 3RQCh. 18 - What is meant by the depreciable cost of a plant...Ch. 18 - Prob. 5RQCh. 18 - Prob. 6RQCh. 18 - Prob. 7RQCh. 18 - For assets acquired after 1986, but before...Ch. 18 - Prob. 9RQCh. 18 - Prob. 10RQCh. 18 - Prob. 11RQCh. 18 - Prob. 12RQCh. 18 - Prob. 13RQCh. 18 - Prob. 14RQCh. 18 - Prob. 15RQCh. 18 - Prob. 16RQCh. 18 - Prob. 17RQCh. 18 - Prob. 18RQCh. 18 - Prob. 19RQCh. 18 - Prob. 20RQCh. 18 - Prob. 21RQCh. 18 - Prob. 22RQCh. 18 - Prob. 23RQCh. 18 - Prob. 1SEACh. 18 - STRAIGHT-LINE, DECLINING-BALANCE, AND...Ch. 18 - UNITS-OF-PRODUCTION METHOD The truck purchased in...Ch. 18 - Prob. 4SEACh. 18 - JOURNAL ENTRIES: DISPOSITION OF PLANT ASSETS...Ch. 18 - Prob. 6SEACh. 18 - STRAIGHT-LINE, DECLINING-BALANCE,...Ch. 18 - UNITS-OF-PRODUCTION METHOD A machine is purchased...Ch. 18 - CALCULATING AND JOURNALIZING DEPRECIATION...Ch. 18 - IMPACT OF IMPROVEMENTS AND REPLACEMENTS ON THE...Ch. 18 - DISPOSITION OF ASSETS: JOURNALIZING Mitchell Parts...Ch. 18 - DEPLETION: CALCULATING AND JOURNALIZING Mineral...Ch. 18 - INTANGIBLE LONG-TERM ASSETS Track Town Co. had the...Ch. 18 - Prob. 1SEBCh. 18 - STRAIGHT-LINE, DECLINING-BALANCE, AND...Ch. 18 - Prob. 3SEBCh. 18 - Prob. 4SEBCh. 18 - JOURNAL ENTRIES: DISPOSITION OF PLANT ASSETS...Ch. 18 - Prob. 6SEBCh. 18 - STRAIGHT-LINE, DECLINING-BALANCE,...Ch. 18 - UNITS-OF-PRODUCTION METHOD A machine is purchased...Ch. 18 - CALCULATING AND JOURNALIZING DEPRECIATION...Ch. 18 - IMPACT OF IMPROVEMENTS AND REPLACEMENTS ON THE...Ch. 18 - DISPOSITION OF ASSETS: JOURNALIZING Mayer Delivery...Ch. 18 - DEPLETION: CALCULATING AND JOURNALIZING Mining...Ch. 18 - Prob. 13SPBCh. 18 - Prob. 1MYWCh. 18 - Creative Solutions purchased a patent from Russell...Ch. 18 - On April 1, 20-3, Kwik Kopy Printing purchased a...Ch. 18 - Prob. 1CP
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- DEPLETION: CALCULATING AND JOURNALIZING Mineral Works Co. acquired a salt mine at a cost of 1,700,000, with no expected salvage value. The estimated number of units available for production from the mine is 3,400,000 tons. (a) During the first year, 200,000 tons are mined and sold. (b) During the second year, 600,000 tons are mined and sold. REQUIRED 1. Calculate the amount of depletion expense for both years. 2. Prepare general journal entries for depletion expense.arrow_forwardDEPLETION: CALCULATING AND JOURNALIZING Mining Works Co. acquired a copper mine at a cost of 1,200,000, with no expected salvage value. The estimated number of units available for production from the mine is 3,000,000 tons. (a) During the first year, 400,000 tons are mined and sold. (b) During the second year, 700,000 tons are mined and sold. REQUIRED 1. Calculate the amount of depletion expense for both years. 2. Prepare general journal entries for depletion expense.arrow_forwardDepletion Prepare the following entries using a general journal: 1. A coal mine was acquired at a cost of $1,500,000 and estimated to contain 6,000,000 tons of ore. No salvage value is expected. During the year, 100,000 tons were mined and sold. Prepare the journal entry for the year's depletion expense. Page: 1 DOC. POST. DATE ACCOUNT TITLE DEBIT CREDIT NO. REF. 20-- Dec. 31 2 2 3 3 2. A silver mine was acquired at a cost of $3,000,000 and estimated to contain 750,000 tons of ore. No salvage value is expected. During the year, 125,000 tons were mined and sold. Prepare the journal entry for the year's depletion expense. Page: 1 DOC. POST. NO. REF. DATE ACCOUNT TITLE DEBIT CREDIT 20-- Dec. 31 2 3 3 00arrow_forward
- A certain mining company has acquired a coal mine for a cost of $4,500,000. No other costs are involved. There is no salvage value. The total coal expected to be extracted from the mine is 35,000 tons. During its first year of operation, the total extraction of coal was 5,700 tons. Using the above information compute:a. the depletion rate per ton of coal extracted.b. the depletion charge of the coal extracted during the first yeararrow_forwardSalter Mining Company purchased the Northern Tier Mine for $50 million cash. The mine was estimated to contain 6.47 million tons of ore and to have a residual value of $1.5 million.During the first year of mining operations at the Northern Tier Mine, 55,000 tons of ore were mined, of which 18,000 tons were sold. a. Prepare a journal entry to record depletion during the year. b. Show how the Northern Tier Mine, and its accumulated depletion, would appear in Salter Mining Company's balance sheet after the first year of operations.arrow_forwardOn April 17 of the current year, a mining company purchased the rights to a mine. The purchase price plus additional costs necessary to prepare the mine for extraction of minerals totaled $6,300,000. The company expects to extract 1,050,000 tons of minerals during a four-year period. During the current year, 255,000 tons were extracted and sold immediately. Required: 1. Calculate depletion for the current year. 2. Is depletion considered part of the product cost and included in the cost of inventory? 1. Depletion for the current year 2. Is depletion considered part of the product cost and included in the cost of inventory?arrow_forward
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