Financial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780134728520
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Question
Chapter 8, Problem 43BE
a.
To determine
Journalize the transaction for the purchase of the minerals.
b.
To determine
Journalize the transaction for the payment of fees and other costs.
c.
To determine
Journalize the transaction for the depletion expense for the first year.
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(Learning Objective 5: Record natural resource assets and depletion) MineralMines paid $425,000 for the right to extract ore from a 250,000-ton mineral deposit. In additionto the purchase price, Mineral Mines paid a $110 filing fee to the country recorder, a $2,000license fee to the state of Colorado, and $55,390 for a geologic survey. Because the companypurchased the rights to the minerals only, it expects this mineral rights asset to have a residualvalue of zero when it is fully depleted. During the first year of production, Mineral Minesremoved 35,000 tons of ore, of which it sold 29,000 tons. Make journal entries to record (a)purchase of the mineral rights, (b) payment of fees and other costs, (c) depletion for first-yearproduction, and (d) cost of the ore sold. Round depletion per unit to the closest cent
Miller Mining acquired rights to a tract of land with the intent of extracting from the land a valu-able mineral. The cost of the rights was $2,500,000 and an estimated 10,000 tons of the mineral are
expected to be extracted. Assuming that 1,600 tons of the mineral are actually extracted in the firstyear, determine the amount of depletion expense that should be recognized for that year.
Perez 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 >
Chapter 8 Solutions
Financial Accounting, Student Value Edition (5th Edition)
Ch. 8 - Prob. 1DQCh. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - What is depreciation, and why is it used in...Ch. 8 - Prob. 5DQCh. 8 - Which depreciation method would be moot...Ch. 8 - Prob. 7DQCh. 8 - Prob. 8DQCh. 8 - Prob. 9DQCh. 8 - Prob. 10DQ
Ch. 8 - Prob. 1SCCh. 8 - Prob. 2SCCh. 8 - How should a capital expenditure for a long-term...Ch. 8 - Which depreciation method usually produces the...Ch. 8 - Prob. 5SCCh. 8 - Prob. 6SCCh. 8 - Prob. 7SCCh. 8 - Prob. 8SCCh. 8 - Prob. 9SCCh. 8 - Prob. 10SCCh. 8 - Prob. 11SCCh. 8 - Prob. 12SCCh. 8 - Prob. 1SECh. 8 - Long-term asset terms (Learning Objective 1) 5-10...Ch. 8 - Prob. 3SECh. 8 - Lump-sum purchase (Learning Objective 2) 5-10 min....Ch. 8 - Errors in accounting for long-term assets...Ch. 8 - Concept of depreciation (Learning Objective 3)...Ch. 8 - Depreciation methods (Learning Objective 3) 10-15...Ch. 8 - Depreciation methods (Learning Objective 3) 10-15...Ch. 8 - Prob. 9SECh. 8 - Prob. 10SECh. 8 - Prob. 11SECh. 8 - Prob. 12SECh. 8 - Prob. 13SECh. 8 - Prob. 14SECh. 8 - Prob. 15SECh. 8 - Other long term assets (Learning Objective 8) 5-10...Ch. 8 - Prob. 17SECh. 8 - Prob. 18AECh. 8 - Prob. 19AECh. 8 - Prob. 20AECh. 8 - Prob. 21AECh. 8 - Depreciation methods (Learning Objective 3) 15-20...Ch. 8 - Prob. 23AECh. 8 - Prob. 24AECh. 8 - Prob. 25AECh. 8 - Prob. 26AECh. 8 - Prob. 27AECh. 8 - Prob. 28AECh. 8 - Prob. 29AECh. 8 - Prob. 30AECh. 8 - Prob. 31AECh. 8 - Prob. 32BECh. 8 - Prob. 33BECh. 8 - Prob. 34BECh. 8 - Prob. 35BECh. 8 - Prob. 36BECh. 8 - Prob. 37BECh. 8 - Prob. 38BECh. 8 - Prob. 39BECh. 8 - Prob. 40BECh. 8 - Prob. 41BECh. 8 - Prob. 42BECh. 8 - Prob. 43BECh. 8 - Prob. 44BECh. 8 - Prob. 45BECh. 8 - Long-term asset costs and partial-year...Ch. 8 - Journalizing long-term asset transactions...Ch. 8 - Prob. 48APCh. 8 - Prob. 49APCh. 8 - Prob. 50APCh. 8 - Prob. 51APCh. 8 - Prob. 52APCh. 8 - Prob. 53BPCh. 8 - Journalizing long-term asset transactions...Ch. 8 - Prob. 55BPCh. 8 - Prob. 56BPCh. 8 - Prob. 57BPCh. 8 - Prob. 58BPCh. 8 - Prob. 59BPCh. 8 - Prob. 1CECh. 8 - Prob. 1CPCh. 8 - Continuing Financial Statement Analysis Problem...Ch. 8 - Prob. 1EIACh. 8 - Prob. 2EIACh. 8 - Financial Analysis Purpose: To help familiarize...Ch. 8 - Prob. 1IACh. 8 - Prob. 1SBACh. 8 - Written Communication A client of yours notified...
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