Perez Company acquires an ore mine at a cost of $3,500,000. It incurs additional costs of $980,000 to access the mine, which is estimated to hold 2,500,000 tons of ore. 255,000 tons of ore are mined and sold the first year. The estimated value of the land after the ore is removed is $500,000. 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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QS 10-13 (Algo) Natural resources and depletion LO P3
Perez Company acquires an ore mine at a cost of $3,500,000. It incurs additional costs of $980,000 to access the mine, which is estimated to hold 2,500,000 tons of ore. 255,000 tons of ore are mined and sold the first year. The estimated value of the land after the ore is removed is $500,000. 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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- 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.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.4 02:59:09 Perez Company acquires an ore mine at a cost of $2,240,000. It incurs additional costs of $627,200 to access the mine, which is estimated to hold 1,600,000 tons of ore. 210,000 tons of ore are mined and sold the first year. The estimated value of the land after the ore is removed is $320,000. 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. eBook Depletion Expense General Journal 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 Help Save &
- Exercise 9.11 (Algo) Depletion of Natural Resources (LO9-7) Salter Mining Company purchased the Northern Tier Mine for $88 million cash. The mine was estimated to contain 1.45 million tons of ore and to have a residual value of $1.4 million. During the first year of mining operations at the Northern Tier Mine, 95,000 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.Natural Resources The Hollister Company acquires a silver mine at the cost of $1,300,000 on January 1. Along with the purchase price Hollister pays additional costs associated with development of $50,000. Hollister expects the mine will have a salvage value of $100,000 once all the silver has been mined. Best estimates are that the mine contains 250,000 tons of ore. Required a. Prepare the entry to record the purchase of the silver mine. b. Prepare the December 31 year-end adjusting entry to record depletion is 60,000 tons of ore are mined and all the ore is sold. c. Prepare the December 31 year-end adjusting entry to record depletion is 60,000 tons of ore are mined but only 15,000 tons of the ore are sold. Description Debit Credit a. Answer Answer Answer Answer Answer Answer Purchase of silver mine b. Answer Answer Answer Answer Answer Answer To record depletion on silver mine. c. Silver inventory Answer Answer Answer…QS 8-13 (Algo) Natural resources and depletion LO P3 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 are. 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. 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
- Problem 10 The Maria Lovella Mining Company purchased for P13,000,000 mining property estimated to contain 1,000,000 tons of ore. The residual value of the property is P1,000,000. Buildings used in mine operations costs P1,000,000 and have an estimated life of ten years with no residual value. Mine machinery costs P2,000,000 with an estimated residual value of P400,000 after its physical life of 4 years. Following is the summary of the company's operations for the first two years: Second Year First Year 100,000 tons Tons mined 130,000 tons Tons sold 80,000 tons 120,000 tons P 45.00 Unit selling price per ton Direct labor P 44.00 P 800,000 P 840,000 Miscellaneous mining overhead P 160,000 P 240,000 Operating expenses P 720,000 P 760,000 Inventories are valued on a first-in, first-out. Depreciation on the building is to be allocated as follows: 20% to operating expenses, 80% to production. Depreciation on machinery is chargeable to production. Question: 26. The cost of inventory (ore) in…Natural Resources The Hollister Company acquires a silver mine at the cost of $1,300,000 on January 1. Along with the purchase price Hollister pays additional costs associated with development of $50,000. Hollister expects the mine will have a salvage value of $100,000 once all the silver has been mined. Best estimates are that the mine contains 250,000 tons of ore. Required a. Prepare the entry to record the purchase of the silver mine. b. Prepare the December 31 year-end adjusting entry to record depletion is 60,000 tons of ore are mined and all the ore is sold. C. Prepare the December 31 year-end adjusting entry to record depletion is 60,000 tons of ore are mined but only 15,000 tons of the ore are sold. Description Debit Credit a. Purchase of silver mine b. 0. To record depletion on silver mine. c. Silver inventory 0. To record depletion on silver mine.Natural Resources The Hollister Company acquires a silver mine at the cost of $1,300,000 on January 1. Along with the purchase price Hollister pays additional costs associated with development of $50,000. Hollister expects the mine will have a salvage value of $100,000 once all the silver has been mined. Best estimates are that the mine contains 250,000 tons of ore. Required a. Prepare the entry to record the purchase of the silver mine. b. Prepare the December 31 year-end adjusting entry to record depletion is 60,000 tons of ore are mined and all the ore is sold. c. Prepare the December 31 year-end adjusting entry to record depletion is 60,000 tons of ore are mined but only 15,000 tons of the ore are sold. Description Credit a. b. c. Silver inventory esc + To record depletion on silver mine. Check ! 1 To record depletion on silver mine. Q Purchase of silver mine ◆ A + 2 W S + # 3 Debit E D 80 0 0 0 0 0 0 0 $ 4 R F 0 0 0 0 0 0 0 % 5 pe T G 6 Y & 7 H U * 8 J FB 1 ( 9 K O 0 L P 4) F11 +…
- Natural Resources The Hollister Company acquires a silver mine at the cost of $2,100,000 on January 1. Along with the purchase price Hollister pays additional costs associated with development of $50,000, Hollister expects the mine will have a salvage value of $300,000 once all the silver has been mined. Best estimates are that the mine contains 250,000 tons of ore. Required a: Prepare the entry to record the purchase of the silver mine. b. Prepare the December 31 year-end adjusting entry to record depletion is 60,000 tons of ore are mined and all the ore is sold, c. Prepare the December 31 year-end adjusting entry to record depletion is 60,000 tons of ore are mined but only 15,000 tons of the are are sold Description Credit 4 # Purchase of silver mine # = To record depletion on silver mine Siver inventory To record depletion on silver mine DebitNatural Resource Depletion and Depreciation of Related Plant Assets P5. Bychowski Company purchased land containing an estimated 10 million tons of ore for a cost of $3,300,000. The land without the ore is estimated to be worth $600,000. The company expects that all the usable ore can be mined in 10 years. Buildings costing $300,000 with an estimated useful life of 20 years were erected on the site. Equipment costing $360,000 with an estimated useful life of 10 years was installed. Because of the remote location, neither the buildings nor the equipment has an estimated residual value. During its first year of operation, the company mined and sold 450,000 tons of ore. REQUIRED 1. Compute the depletion charge per ton. 2. Compute the depletion expense that Bychowski should record for the year. 3. Determine the depreciation expense for the year for the buildings, making it pro- portional to the depletion. 4. Determine the depreciation expense for the year for the equipment under two alter-…Problem 1Fool’s Gold, Inc. paid P5,000,000 for land having an ore body estimated to contain 2,000,000 tons of ore. The land will havea value of P400,000 after exhaustion of the mine. Other relevant costs paid were:Exploration cost P1,000,000Geological survey 500,000Development cost P1,500,000The entity installed heavy machinery costing P4,000,000, having a 10-year useful life and capable of exhausting the minein 8 years. The entity mined 300,000 tons of ore during the first six months of operations.Required:Prepare journal entries to record the following:1. Purchase of the ore property2. Payment for other relevant costs3. Installation of the heavy machinery4. Depletion for the first six months5. Depreciation for the first six months