Required information [The following information applies to the questions displayed below.] Last Chance Mine (LCM) purchased a coal deposit for $1,667,600. It estimated it would extract 18,950 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.32 million, $5 million, and $4.1 million for years 1 through 3, respectively. During years 1-3, LCM reported net income (loss) from the coal deposit activity in the amount of ($17,500), $702,500, and $695,000, respectively. In years 1-3, LCM extracted 19,950 tons of coal as follows: (1) Tons of Coal 18,950 Year 1 4,800 Tons Extracted per Year Year 2 9,150 Note: Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars. Depletion (2) Basis (2)+(1) Rate $1,667,600 $88.00 Year 1 Year 2 Year 3 b. What is LCM's percentage depletion for each year (the applicable percentage for coal is 10 percent)? Year 3 6,000 Percentage Depletion

Required information [The following information applies to the questions displayed below.] Last Chance Mine (LCM) purchased a coal deposit for $1,667,600. It estimated it would extract 18,950 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.32 million, $5 million, and $4.1 million for years 1 through 3, respectively. During years 1-3, LCM reported net income (loss) from the coal deposit activity in the amount of ($17,500), $702,500, and $695,000, respectively. In years 1-3, LCM extracted 19,950 tons of coal as follows: (1) Tons of Coal 18,950 Year 1 4,800 Tons Extracted per Year Year 2 9,150 Note: Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars. Depletion (2) Basis (2)+(1) Rate $1,667,600 $88.00 Year 1 Year 2 Year 3 b. What is LCM's percentage depletion for each year (the applicable percentage for coal is 10 percent)? Year 3 6,000 Percentage Depletion

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter18: Accounting For Long-term Assets

Section: Chapter Questions

Problem 6CE

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Last Chance Mine (LCM) purchased a coal deposit for $750,000. It estimated it would extract 12,000 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1 million, $3 million, and $2 million for years 1 through 3, respectively. During years 1–3, LCM reported net income (loss) from the coal deposit activity in the amount of ($20,000), $500,000, and $450,000, respectively. In years 1–3, LCM extracted 13,000 tons of coal as follows: (Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars.) (1) Tons of Coal (2) Basis Depletion (2)/(1) Rate Tons Extracted per Year Year 1 Year 2 Year 3 12,000 $ 750,000 $ 62.50 2,000 7,200 3,800 What is LCM's cost depletion for years 1, 2, and 3?
Last Chance Mine (LCM) purchased a coal deposit for $750,000. It estimated it would extract 12,000 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1 million, $3 million, and $2 million for years 1 through 3, respectively. During years 1–3, LCM reported net income (loss) from the coal deposit activity in the amount of ($20,000), $500,000, and $450,000, respectively. In years 1–3, LCM extracted 13,000 tons of coal as follows: (Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars.) (1) Tons of Coal (2) Basis Depletion (2)/(1) Rate Tons Extracted per Year Year 1 Year 2 Year 3 12,000 $ 750,000 $ 62.50 2,000 7,200 3,800 What is LCM's percentage depletion for each year (the applicable percentage for coal is 10 percent)?
Last Chance Mine (LCM) purchased a coal deposit for $1,654,350. It estimated it would extract 13,450 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.35 million, $6.25 million, and $5.2 million for years 1 through 3, respectively. During years 1–3, LCM reported net income (loss) from the coal deposit activity in the amount of ($16,400), $705,000, and $577,500, respectively. In years 1–3, LCM extracted 14,450 tons of coal as follows: (1) Tons of Coal (2) Basis Depletion (2)/(1) Rate Tons Extracted per Year Year 1 Year 2 Year 3 13,450 $1,654,350 $123.00 2,550 7,450 4,450 c. Using the cost and percentage depletion computations from parts (a) and (b), what is LCM's actual depletion expense for each year?
Last Chance Mine (LCM) purchased a coal deposit for $2,282,400. It estimated it would extract 15,850 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.21 million, $51 million, and $4.3 million for years 1 through 3, respectively. During years 1–3, LCM reported net income (loss) from the coal deposit activity in the amount of ($16,500), $730,000, and $527,500, respectively. In years 1–3, LCM extracted 16,850 tons of coal as follows: (Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars.) (1) Tons of Coal Year 1 (2) Basis Depletion (2)/(1) Tons Extracted per Rate Year 3 Year Year 2 15,850 $2,282,400 $144.00 4,150 7,300 5,400 c. Using the cost and percentage depletion computations from parts (a) and (b), what is LCM's actual depletion expense for each year?
Last Chance Mine (LCM) purchased a coal deposit for $1,654,350. It estimated it would extract 13,450 tons of coal from the deposit. LCM mined the coal and sold it, reporting gross receipts of $1.35 million, $6.25 million, and $5.2 million for years 1 through 3, respectively. During years 1–3, LCM reported net income (loss) from the coal deposit activity in the amount of ($16,400), $705,000, and $577,500, respectively. In years 1–3, LCM extracted 14,450 tons of coal as follows: (1) Tons of Coal (2) Basis Depletion (2)/(1) Rate Tons Extracted per Year Year 1 Year 2 Year 3 13,450 $1,654,350 $123.00 2,550 7,450 4,450 b. What is LCM's percentage depletion for each year (the applicable percentage for coal is 10 percent)?
In January year 1, the Under Mine Corporation purchased a mineral mine for $3,400,000 with removable ore estimated by geological surveys at 4,000,000 tons. The property has an estimated value of $200,000 after the ore has been extracted. The company incurred $800,000 of development costs preparing the mine for production. During year 1,400,000 tons were removed and 375,000 tons were sold. What is the amount of depletion that Under Mine should record for year 1? ○ $420,000 $375,000 ○ $400,000 ○ $393,750
Required information [The following information applies to the questions displayed below.] On July 23 of the current year, Dakota Mining Company pays $4,715,000 for land estimated to contain 5,125,000 tons of recoverable ore. It installs and pays for machinery costing $410,000 on July 25. The company removes and sells 480,000 tons of ore during its first five months of operations ending on December 31. Depreciation of the machinery is in proportion to the mine's depletion as the machinery will be abandoned after the ore is mined. Required: Prepare entries to record the following. (a) The purchase of the land. (b) The cost and installation of machinery. (c) The first five months' depletion assuming the land has a net salvage value of zero after the ore is mined. (d) The first five months' depreciation on the machinery. Complete this question by entering your answers in the tabs below. Required A Required B Required C1 Required C2 Required D1 Required D2 Prepare the journal entry to…
On 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?
Required information [The following information applies to the questions displayed below.] On July 23 of the current year, Dakota Mining Company pays $4,715,000 for land estimated to contain 5,125,000 tons of recoverable ore. It installs and pays for machinery costing $410,000 on July 25. The company removes and sells 480,000 tons of ore during its first five months of operations ending on December 31. Depreciation of the machinery is in proportion to the mine's depletion as the machinery will be abandoned after the ore is mined. Required: Prepare entries to record the following. (a) The purchase of the land. (b) The cost and installation of machinery. (c) The first five months' depletion assuming the land has a net salvage value of zero after the ore is mined. (d) The first five months' depreciation on the machinery.
Intra-Spect Mining Co. acquired mineral rights for $52,000,000. The mineral deposit is estimated at 40,000,000 tons. During the current year, 9,200,000 tons were mined and sold. Question Content Areaa. Determine the depletion rate. If required, round your answer to two decimal places.$fill in the blank 6865550bc008074_1 per ton b. Determine the amount of depletion expense for the current year.$fill in the blank 6865550bc008074_2Question Content Areac. 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 - Select -- Select - - Select -- Select - eBook Show Me How Question Content Area Impaired Goodwill and Amortization of Patent On April 1, a patent with an estimated useful economic life of 12 years was acquired for $115,200. In addition, on December 31, it was estimated that goodwill of $51,500 was impaired. Question Content Area a. Record the acquisition of patent. If…
Salter Mining Company purchased the Northern Tier Mine for $21 million cash. The mine was estimated to contain 2.5 million tons of ore and to have a residual value of $1 million. During the first year of mining operations at the Northern Tier Mine, 50,000 tons of ore were mined, of which 40,000 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. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required 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. (Amounts to be deducted should be indicated by a minus sign) Property, plant, & equipment Accumulated depletion Mining property: Northern Tier Mine Salter Mining Company Balance…
Required information [The following Information applies to the questions displayed below.) On July 23 of the current year, Dakota Mining Company pays $4,715,000 for land estimated to contain 5,125,000 tons of recoverable ore. It Installs and pays for machinery costing $410,000 on July 25. The company removes and sells 480,000 tons of ore during its first five months of operations ending on December 31. Depreciation of the machinery is in proportion to the mine's depletion as the machinery will be abandoned after the ore is mined. Required: Prepare entries to record the following. (a) The purchase of the land. (b) The cost and installation of machinery. (c) The first five months' depletion assuming the land has a net salvage value of zero after the ore is mined. (d) The first five months' depreciation on the machinery. Complete this question by entering your answers in the tabs below. Required A Required B Required C1 Required C2 Required D1 Required D2 Prepare the journal entry to…