Weber Company purchased a mining site for $525,247 on July 1. The company expects to mine ore for the next 10 years and anticipates that a total of 85,242 tons will be recovered. The estimated residual value of the property is $49,377. During the first year, the company extracted 4,550 tons of ore. The depletion expense is Oa. $47,587.00 Ob. $25,400.72 Oc. $28,036.34 Od. $49,377.00
Q: Copy equipment was acquired at the beginning of the year at a cost of $37,120 that has an estimated…
A: Depreciation is the allocation of cost of asset over the useful life of the asset. It can be charged…
Q: Early in the current year, Tokay Co. purchased the Silverton Mine at a cost of $15,500,000. The mine…
A: Computation for the book value of the mine at year end is as follows:First we need to calculate the…
Q: Golden Sales has bought $135,000 in fixed assets on January 1st associated with sales equipment. The…
A: Formula: Straight line method: ( Cost of Asset - salvage value ) / useful life Depreciable cost =…
Q: Maggie Company expects to extract 20 million tons of coal from a mine that cost $12 million. If no…
A: The depletion expense is charged on mines that are extracted naturally.
Q: Perez Company acquires an ore mine at a cost of $1,680,000. It incurs additional costs of $470,400…
A: The cost of ore mine will include cost of purchase plus cost incurred to access the mine.
Q: Miller Mining acquired rights to a tract of land with the intent of extracting from the land a…
A: Depletion: It can be defined as a reduction or fall in the value of natural resources being used in…
Q: Sergei Company purchases land for $4,000,000 from which it expects to extract 2,000,000 tons of…
A: Unit depletion rate = (Cost of the coal mine - residual value) / Estimated tons of coal
Q: A new year had begun, JK Company, a mining institute, purchased a mineral mine for P56,000,000 with…
A: Depletion refers to the reduction in value. It is the non-cash expense of the business recorded by…
Q: Weber Company purchased a mining site for $585,330 on July 1. The company expects to mine ore for…
A: Depletion per tons = (Purchased Cost of mining site - estimated residual value) / anticipated tons =…
Q: Colorado Mining paid $495,000 to acquire a mine with 45,000 tons of coal reserves. The following…
A: Depletion charge per unit is calculated by deducting the residual value from the cost of the asset…
Q: Norika Company purchased a truck for $44,000. The company expected the truck to have a useful life…
A: Double declining depreciation rate = Straight line depreciation rate x 2 = (100/4 years) x 2 = 50%
Q: The Weber Company purchased a mining site for $510,498 on July 1. The company expects to mine ore…
A: Calculation of Depletion rate per tonne Depletion rate per tonne = Purchase price of mining site/…
Q: On the first day of the fiscal year, Alpha Corporation purchased a machine with a cost of s65,000.…
A: Straight line method In straight line method, value of a fixed asset is decreased gradually over its…
Q: Weber Company purchased a mining site for $690,727 on July 1. The company expects to mine ore for…
A: b.$44,598.37
Q: In January 2018, HUKAY Mining Corporation purchased a mineral mine for P7,200,000 with removable ore…
A: Depletion can be defined as the method that is used to determine and allocate the cost of extracting…
Q: Galali mining company on April 30, paid BD 1,400,000 for a an ore with a capacity 1,400,000 tonnes…
A: The Numerical has covered the concept of Depletion Expenses. Depletion expense charge on the use of…
Q: Salter Mining Co. purchased the Northern Tier Mine for $61 million cash. The mine was estimated to…
A: Journal entry - It refers to the process where the business transactions are recorded in the books…
Q: Moon Ltd acquired a plant for the cost of $58,000. It is expected that the plant will continue to be…
A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…
Q: An ice machine was purchased for $400,000 with a residual value of $75,000 and a life of 2,500…
A: Assets: Assets are the resources of an organization used for the purpose of business operations.…
Q: The Weber Company purchased a mining site for $534,246 on July 1. The company expects to mine ore…
A: Wasting assets: These are the assets which will have only a limited useful life and the value of…
Q: LM Corporation purchased 20 acres of land for P120,000,000. The company expects to extract 5 million…
A: Purchase price of Land = P120,000,000 Exploration cost = P10,000,000 Dry well cost = P1,600,000…
Q: Copy equipment was acquired at the beginning of the year at a cost of $60,040 that has an estimated…
A: A) Depreciable cost = Cost of Equipment - Residual value =$60040 - $5500 =$54540 Depreciable cost…
Q: Copy equipment was acquired at the beginning of the year at a cost of $62,460 that has an estimated…
A: Units of activity method: Under units-of-activity method, depreciation is computed based on the…
Q: In January 20X1, ABC Mining Corporation purchased a mineral mine for P7,200,000 with removable ore…
A: Inventory is the stock which are available in hand for sale. The development costs are added on the…
Q: LM Corporation purchased 20 acres of land for P120,000,000. The company expects to extract 5 million…
A: Cost of land = P120,000,000 Expected minerals to be extracted = 5,000,000 Salvage value = P6,000,000…
Q: Bixby Corporation purchased a forklift for $40,000 on July 1. The forklift has an estimateduseful…
A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…
Q: In 20x1, Newman Company paid P1,000,000 to purchase land containing a total estimated 160,000 tons…
A: Solution: Total cost of land= P1,000,000. Estimated value after mineral have been removed= P200,000…
Q: Perez Company acquires an ore mine at a cost of $2,660,000. It incurs additional costs of $744,800…
A: Depreciation is a reduction in the value of assets due to the usage of that asset. We can evaluate…
Q: The Weber Company purchased a mining site for $1,750,000 on July 1. The company expects to mine ore…
A: Depletion is a charge or expense on a fixed asset. It is similar to depreciation expense. The only…
Q: On January 1, 20x1, DEF Mining Corp. purchased an ore mine at P30,000,000. The cost of exploration…
A: Cost of mine will also include development cost . Depletion Expense = Cost - Salvage value…
Q: Weber Company purchased a mining site for $617,434 on July 1. The company expects to mine ore for…
A: Depreciation or depletion is a decrease in the value of an asset due to various reasons like wear…
Q: The Weber Company purchased a mining site for $580,128 on July 1. The company expects to mine ore…
A: Given, Cost of machone = $580,128 Total tons = 85,978 Depletion expense per ton = (Cost - Salvage…
Q: depletion expense
A: Depletion expense is the cost of extracting natural resources. It is written off against revenue.
Q: Big Rig Delivery Service has the following plant assets: Communications Equipment: Cost, $8,640 with…
A: Option C "Debit to Depreciation expenses - Equipment of $5700" Explanation :- Journal Entry…
Q: The Weber Company purchased a mining site for $573,259 on July 1. The company expects to mine ore…
A: For the use of natural resources, depletion expenses is charged (against profits). It is most common…
Q: Salter Mining Company purchased the Northern Tier Mine for $50 million cash. The mine was estimated…
A: DEPLETION PER ORE = (COST - RESIDUAL VALUE) / NUMBER OF TOTAL TONS OF ORE = ($50 MILLION - $1.5…
Q: Salter Mining Company purchased the Northern Tier Mine for $21 million cash. The mine was estimated…
A: Depletion is an accounting concept similar to depreciation, but its uses are in industries that…
Q: Colorado Mining paid $686,000 to acquire a mine with 49,000 tons of coal reserves. The financial…
A: Total tons used in year 1 and 2=25,725+22,050=47,775
Q: Copy equipment was acquired at the beginning of the year at a cost of $41,560 that has an estimated…
A: Depreciation (Units of output method) =[ ( cost of Asset - salvage value ) x Actual output] /…
Q: Dexter Industries purchased packaging equipment on January 8 for $511,400. The equipment was…
A: Formula: Straight line method = ( Asset cost - Salvage value ) / Useful life years
Q: Golden Sales has bought $135,000 in fixed assets on January 1st associated with sales equipment. The…
A: Assets: Assets are the resources of an organization used for the purpose of business operations.…
Q: Golden Sales has bought $135,000 in fixed assets on January 1st associated with sales equipment. The…
A: Double declining depreciation rate = Straight line depreciation rate x 2 = (100/4 years) x 2 = 50%
Q: In connection with your audit of the ABC Mall Corporation for the year ended December 31, 20X1, you…
A: We are required by the question to calculate the cost of inventory. We have been given details of…
Q: On July 23 of the current year, Dakota Mining Co. pays $4,715,000 for land estimated to contain…
A: Hi student Since there are multiple sub parts, we will answer only first three sub parts.
Q: Pharoah Company purchased for $4,543,000 a mine that is estimated to have 45,430,000 tons of ore and…
A: Introduction: Depletion: Depletion expense to be recorded in Income statement. Depletion is…
Q: At the beginning of the current year, Handsome Company purchased a mineral mine for P36,000,000 with…
A: Total cost of mineral mine = purchased costs + development costs = P36,000,000 + P10,800,000 =…
Q: The Weber Company purchased a mining site for $674,927 on July 1. The company expects to mine ore…
A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…
Q: Sergei Company purchases land for $4,000,000 from which it expects to extract 2,000,000 tons of…
A: Introduction: Depletion: Decreasing value of assets over its useful life period called as Depletion.…
Q: In connection with your audit of the ABC Mall Corporation for the year ended December 31, 20X1, you…
A: The question is based on the concept of Business Accounting.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- 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.Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for 120,000 miles. Montello uses the units-of-production depreciation method and in year one it expects to use the truck for 23,000 miles. Calculate the annual depreciation expense.A machine costing 350,000 has a salvage value of 15,000 and an estimated life of three years. Prepare depreciation schedules reporting the depreciation expense, accumulated depreciation, and book value of the machine for each year under the double-declining-balance and sum-of-the-years-digits methods. For the double-declining-balance method, round the depreciation rate to two decimal places.
- Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the assets life, and create the journal entry for year five.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?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.
- IMPACT OF IMPROVEMENTS AND REPLACEMENTS ON THE CALCULATION OF DEPRECIATION On January 1, 20-1, Dans Demolition purchased two jackhammers for 2,500 each with a salvage value of 100 each and estimated useful lives of four years. On January 1, 20-2, a stronger blade to improve performance was installed in Jackhammer A for 800 cash and the compressor was replaced in Jackhammer B for 200 cash. The compressor is expected to extend the life of Jackhammer B one year beyond the original estimate. REQUIRED 1. Using the straight-line method, prepare general journal entries for depreciation on December 31, 20-1, for Jackhammers A and B. 2. Enter the transactions for January 20-2 in a general journal. 3. Assuming no other additions, improvements, or replacements, calculate the depreciation expense for each jackhammer for 20-2 through 20-4.Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montello uses the straight-line depreciation method. Calculate the annual depreciation expense.Montezuma Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montezuma uses the straight-line depreciation method. Calculate the annual depreciation expense. After three years of recording depreciation, Montezuma determines that the delivery truck will only be useful for another three years and that the salvage value will increase to $4,000. Determine the depreciation expense for the final three years of the assets life, and create the journal entry for year four.
- 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.Weber Company purchased a mining site for $617,434 on July 1. The company expects to mine ore for the next 10 years and anticipates that a total of 96,158 tons will be recovered. The estimated residual value of the property is $52,737. During the first year, the company extracted 4,119 tons of ore. The depletion expense is a.$52,737.00 b.$56,469.70 c.$26,448.25 d.$24,189.22The Weber Company purchased a mining site for $674,927 on July 1. The company expects to mine ore for the next 10 years and anticipates that a total of 87,066 tons will be recovered. During the first year the company extracted 4,680 tons of ore. The depletion expense is a.$36,270.00 b.$62,964.00 c.$33,844.61 d.$45,287.00