Al Kawthar Company has oil and gas properties located only in the United States. Data for Al Kawthar Company as of December 31, 2020, are as follows: Cost to be amortized 37,500,000 Production during 2020 Oil 19,000,000 bbl Gas 18,000,000 Mcf Proved reserves. 31/12/20 Oil 14,000,000 bbl Gas 32,000,000 Mcf Selling price at 31/12/20 Oil 120 bbl %24

Al Kawthar Company has oil and gas properties located only in the United States. Data for Al Kawthar Company as of December 31, 2020, are as follows: Cost to be amortized 37,500,000 Production during 2020 Oil 19,000,000 bbl Gas 18,000,000 Mcf Proved reserves. 31/12/20 Oil 14,000,000 bbl Gas 32,000,000 Mcf Selling price at 31/12/20 Oil 120 bbl %24

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 29CE

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Al Kawthar Company has oil and gas properties located only in the United States. Data for Al Kawthar Company as of December 31, 2020, are as follows: Cost to be amortized 37,500,000 Production during 2020 Oil 19,000,000 bbl 18,000,000 Mct Gas Proved reserves, 31/12/20 Oil Gas 14,000,000 32,000,000 Mcf bbl Selling price at 31/12/20 Oil 120 bbl 20 Mct Gas Average selling price during 2020 Oil 110 bbl 12 Mct Gas Compute the DD&A based on unit-of-revenue for 2020. Show ALL workings.
The Bellview Corporation, which sells a single commodity, show the following operating results for a 3-year period: 2018 2019 2020 Р6,000,000 4,080,000 P1,920,000 1,400,000 P520,000 Р6,200,000 4,216,000 P1,984,000 1,500,000 P484,000 Sales P4,500,000 2,925,000 P1,575,000 1,200,000 P375,000 Cost of Sales Gross Profit Operating Expenses Net Income The selling prices of the commodity sold were as follows: in 2018, P22.50%3; in 2019, P24.00; and in 2020, P25.00. REQUIRED: 1. Prepare a summary of the detailed changes in gross profit for 2019 and 2020 as compared with the year immediately preceding in terms of volume changes and price changes for both sales and costs. CS Smad atth Camnnor
8. How much is the Gross Profit/Loss Realized in 2018? * Triple Take Construction Co. began construction of a project in 2017 for a contract price of P9,600,000. The project is to be completed in 4 years or in the year 2021. The following are the details regarding the construction project 2017 2018 2019 Costs inenered to dnte Estimsted cost to complete Progess Billings to dnte Cash Collectiona for the year 2160,000 4,500,000 7,520,000 6840,000 5,500,000 1,690, 000 2,304,000 4,320,000 7,680,000 1,728.000 3,240,000 5,760,000 9. How much is the Gross Profit/Loss Realized in 2019? * Xurpas Homes entered into a construction agreement in 2018 for the construction of condominium buildings. The original contract price was P20,000,000 but a change order was issued in 2019 that increases the price by P2,000,000. The percentage of completion method is used by the company in recognizing revenue. The following are information regarding the company. 2018 10,200,000 10,200,000 9,800,000 8,760,000…
The exit price of an asset is RO 10,000 and the cost of disposal of the asset is RO 150. The asset is estimated to yield a future cash flow of RO 1000 per annum for the next five years. The Net realizable value of the asset under current cost accounting is a. RO 10,850 b. RO 11,150 c. RO 9500 d. RO 9850
Nylon have assigned $1.5 million dollars to purchase the asset(s). Nylon's WACC is 8%. Years Asset L Asset M Asset N Initial Costs $700,000 $800,000 $500,000 Expected Cash Inflows: 2018 300,000 200,000 2019 250,000 200,000 200,000 2020 200,000 200,000 200,000 2021 150,000 200,000 150,000 2022 200,000 150,000 Requirement: Recommend which Asset(s) the company should purchase based on the Payback and Net Present Value Capital Budgeting Techniques. If the funds allow for the purchase of more than one asset, rank them from most favourable to least and select the ones to be purchased.
On November 15, 2020, Diamond Company entered into a Problem 12-12 (IAA) On November 15, 2020, Diamond Company entered into commitment to purchase 10,000 ounces of gold 15, 2021 at a price of P310 per ounce. on February On December 31, 2020, the market price of gold is P270 Der ounce. On February 15, 2021, the price of gold is P300 per per ounce. on December 31, 2020? a. 400,000 b. 100,000 300,000 d. с. 2. What is the gain on purchase commitment to be recognized on February 15, 2021? 400,000 b. 300,000 100,000 а. с. d. 3. What amount should be debited to purchases on February 15, 2021? a. 3,000,000 b. 3,100,000 с. 2,700,000 d. 3,500,000 4. What amount should be recognized as accounts payable on February 15, 2021? a. 2,700,000 b. 3,100,000 c. 3,500,000 d. 3,000,000
A company recorded $10m of development costs as at 31 December 2018. The company expects the net profit of this newly developed product to be $15m over four years. 30% of this profit is expected to be earned in 2019, 30% in 2020, 20% in 2021 and balance in 2022. The amortisation amount for 2019 and 2020 is: Question 7 options: 1) $2.5m for both years 2) $3.0m for both years 3) $4.0m for both years 4) $4.0m and 5.0m respectively
In 2020, Lalli Corporation incurred R&D costs as follows:Materials and equipment P100,000Personnel 100,000Indirect costs 50,000P250,000These cost relate to a product that will be marketed in 2021. The Company estimates that these costs will be recouped by December 31, 2024.Required What is the amount of R&D costs expense in 2020?
A machine acquired for £480,000 on 1st May 2018 and depreciated at 10% per annum using the straight-line method, has a market value of £600,000 on 1st May 2022. How much is the revaluation gain to be included in the Revaluation Surplus account, if the machine is to be revalued on 1st May 2022? £312,000 £72,000 £360,000 £120,000
Alta Company is constructing a production complex that qualifies for interest capitalization. The following information is available: • Capitalization period: January 1, 2019, to June 30, 2020 • Expenditures on project: 2019: 2020: January 1 May 1 October 1 $ 540,000 537,000 600,000 March 1 June 30 Amounts borrowed and outstanding: $1.7 million borrowed at 10%, specifically for the project $7 million borrowed on July 1, 2018, at 12% $16 million borrowed on January 1, 2017, at 6% Required: 1,404,000 504,000 Note: Round all final numeric answers to two decimal places. 1. Compute the amount of interest costs capitalized each year. Capitalized interest, 2019 $ Capitalized interest, 2020 2. If it is assumed that the production complex has an estimated life of 25 years and a residual value of $0, compute the straight-line depreciation in 2020. $ 3. Since GAAP requires accrual accounting, if a company capitalizes interest during the construction period it will report will report income than…
Initial project set-up costs are estimated to be SEK15m (year 0-2023). Further estimated operating costs and projected revenues are as follows: Operating costs - Years 1-5 (2024-2028) All figures are in millions of SEK. Further costs are presented in the table below. No inflationary adjustments have been made Year Operational costs Maintenance costs Tech update costs Y1 6 Year Revenue (merchant fees) 4 3 Y2 6 Y1 8 4 3 Important points to note (after year 1): • Operational costs are estimated to increase by 3.5% per year • Maintenance costs are estimated to increase by 2.8% per year • Tech update costs are estimated to increase by 2% per year Revenue - revenue projections have been estimated as are follows: Y2 20 Y3 6 4 3 The discount rate used by BioMet is 4.5% per annum. Task Y3 22 in Y4 6 4 3 Y4 25 the Y5 6 4 3 Y5 30 table. 1. Prepare a cashflow forecast and use investment appraisal techniques to calculate Net Present Value (NPV), Return on Capital (ROC) and Payback Period (PB) for…
The following information relates to Machine Productive at 31 December 2020:RHistoric Carrying amount 400 000Fair value less cost to sell 340 000Value in Use 320 000Tax Base 300 000 Remaining useful life 4 yearsOne year later the fair value less cost to sell was R320 000 and the value in use was R380 000. Machine Productive isdepreciated on a straight-line basis. Assume that the tax rate is 28%, and a capital allowance of R100 000 was granted in 2021REQUIRED:Prepare the journal entries relating to the reversal of the impairment loss in the 2021 year of assessment