At the beginning of the current year, Bert Company purchased a mineral mine for P26,400,000 with removable ore estimated at 1,200,000 tons. After it has extracted all the ore, Bert will be required by law to restore the land to its original condition at an estimated cost of P2,100,000. The present value of the estimated restoration cost is P1,800,000. Bert believed that it will be able to sell the property afterwards for P3,000,000. During the current year, Bert incurred P3,600,000 of development cost preparing the mine for production. removed 80,000 tons of ore and sold 60,000 tons.
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- The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining legal life of twelve years is bought, and Hanna expects to be able to use it for six years. It is purchased at a cost of $48,000. B. A copyright with a remaining life of thirty years is purchased, and Hanna expects to be able to use it for ten years. It is purchased for $70,000. Determine the annual amortization amount for each intangible asset.Utica Corporation paid 360,000 to purchase land and a building. An appraisal showed that the land is worth 100,000 and the building is worth 300,000. What cost should Utica assign to the land and to the building, respectively?Tree Lovers Inc. purchased 100 acres of woodland in which the company intends to harvest the complete forest, leaving the land barren and worthless. Tree Lovers paid $2,100,000 for the land. Tree Lovers will sell the lumber as it is harvested and expects to deplete it over five years (twenty acres in year one, thirty acres in year two, twenty-five acres in year three, fifteen acres in year four, and ten acres in year five). Calculate the depletion expense for the next five years and create the journal entry for year one.
- The following intangible assets were purchased by Goldstein Corporation: A. A patent with a remaining legal life of twelve years is bought, and Goldstein expects to be able to use it for seven years. B. A copyright with a remaining life of thirty years is purchased, and Goldstein expects to be able to use it for ten years. For each of these situations, determine the useful life over which Goldstein will amortize the intangible assets.At the beginning of the current year, JKL Company purchased a mineral mine for P26,400,000 with removable ore estimated at 1,200,000 tons. After it has extracted all the ore, the entity will be required by law to restore the land to its original condition at an estimated cost of P2,100,000. The present value of the estimated restoration cost is P1,800,000. The entity believed that it will be able to sell the property afterwards for P3,000,000. During the current year, the entity incurred P3,600,000 of development cost preparing the mine for production, removed 80,000 tons of ore and sold 60,000 tons. Determine the total amount of depletion should be recorded for the current year. 1,920,000 b. 1,440,000 c. 1,940,000 d. 1,455,000On January 1, 2022, Annie Company purchased a mineral mine for P26,400,000 with removable ore estimated at 1,200,000 tons. After it has all the ore, the entity will be required by law to restore the land to its original condition at an estimated cost of P2,200,000. The present value of the estimated restoration cost is P1,800,000. The property can be sold afterwards for P3,000,000. During 2021, the entity incurred P2,000,000 exploration cost and P1,600,000 development cost preparing the mine for production. The entity removed 80,000 tons of ore and sold 60,000 tons of ore in 2022. What amount of depletion should be included in the cost of sales for 2022? А. 1,920,000 B. 1,440,000 С. 1,500,000 D. 1,590,000
- On January, 2023, Big Company purchased a mineral mine for P2,640,000 with removable ore estimated at 1,200,000 tons. After it has extracted all the ore, Big Company will be required by law to restore the land to its original condition at an estimated cost of P220,000. The present value of the estimated restoration costs is P180,000. Big Company believes it will be able to sell the property afterwards for P300,000. During 2023, Big Company incurred P360,000 development costs preparing the mine for production and removed and sold 60,000 tons of ore. In its 2023 Income Statement, what amount should Big Company report as depletion? a. 135,000 b. 144,000 c. 150,000 d. 159,000On January 1, 2020, Hilary Company purchased a mineral mine for P26,400,000 with removable ore estimated at 1,200,000 tons. After it has extracted all the ore, the entity will be required by law to restore the land to the original condition at an estimated cost of P2,200,000. The present value of the estimated restoration cost is P1,800,000. The property can be sold afterwards for P3,000,000. During 2020, the entity incurred P2,000,000 exploration cost and P1,600,000 development cost preparing the mine for productions. The entity removed 80,000 tons of ore and sold 60,000 tons of ore in the current year. What amount of depletion should be included in cost of sales for the current year? 1,920,000 1,440,000 1,455,000 1,940,000 What is the depletion for the current year? 1,920,000 1,440,000 1,940,000 1,455,000In January 2020, Mark Company purchased a mineral mine for P36,000,000 with removable ore estimated by geological survey at 4,000,000 tons. The property has an estimated value of P3,600,000 after the ore has been extracted. The entity incurred P10,800,000 of development cost preparing the property for the extraction of ore. The entity is required to restore the property to the original condition at an estimated cost of P2,500,000. The present value of the estimated restoration cost is P1,800,000. During 2020, 400,000 tons were removed, and 300,000 tons were sold. For the year ended December 31, 2020, what amount of depletion should be included in cost of goods sold? 3,375,000 O 4,570,000 3,427,500 O 4,500,000
- Vaughn Mining Company purchased land on February 1, 2025, at a cost of $1,031,100. It estimated that a total of 54,000 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $99,900. It believes it will be able to sell the property afterwards for $111,000. It incurred developmental costs of $222,000 before it was able to do any mining. In 2025, resources removed totaled 27,000 tons. The company sold 19,800 tons. Compute the following information for 2025. a. Per unit mineral cost $enter a dollar amount per ton /ton b. Total material cost of December 31, 2025, inventory $enter a dollar amount c. Total material cost in cost of goods sold at December 31, 2025 $enter a dollar amountBonita Mining Company purchased land on February 1, 2025, at a cost of $1,252,100. It estimated that a total of 57,000 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $108,900. It believes it will be able to sell the property afterwards for $121,000. It incurred developmental costs of $242,000 before it was able to do any mining. In 2025, resources removed totaled 28,500 tons. The company sold 20,900 tons. Compute the following information for 2025. a. b. C. Per unit mineral cost Total material cost of December 31, 2025, inventory Total material cost in cost of goods sold at December 31, 2025 $ $ /tonBlue Mining Company purchased land on February 1, 2025, at a cost of $914,200. It estimated that a total of 57,300 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $109,800. It believes it will be able to sell the property afterwards for $122,000. It incurred developmental costs of $244,000 before it was able to do any mining. In 2025, resources removed totaled 28,650 tons. The company sold 21,010 tons. Compute the following information for 2025. a. b. C. Per unit mineral cost Total material cost of December 31, 2025, inventory Total material cost in cost of goods sold at December 31, 2025 $ tA $ /ton