What is LCM's cost depletion for years 1, 2, and 3?
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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?
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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 percentage depletion for each year (the applicable percentage for coal is 10 percent)?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 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)?Nevada Gold Company (LLC) purchased a gold deposit for $1,500,000. It estimated it would extract 500,000 ounces of gold from the deposit. The company mined the gold and sold it, reporting gross receipts of $1.8 million, $2.5 million, and $2 million for Years 1 through 3, respectively. During Years 1 through 3, Nevada Gold reported net income (loss) from the gold deposit activity in the amount of ($100,000), $400,000, and $100,000, respectively. In Years 1 through 3, the company actually extracted 300,000 ounces of gold as follows: Ounces of Gold extracted per year Year 1 Year 2 Year 3 50,000 150,000 100,000 What is Nevada Gold's depletion deduction for Year 2 if the applicable percentage depletion for gold is 15 percent? Question 8 options: $450,000. $400,000. $375,000. $200,000.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
- 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…Colorado Mining paid $564.000 to acquire a mine with 47,000 tons of coal reserves. The financial statements model shown on the last tab reflects Colorado Mining's financial condition just prior to purchasing the coal reserves. The company extracted 24,675 tons of coal in year Land 21150 tons in year 2. Required a Compute the depletion charge per unit b-1. Compute the depletion expense for years 1 and 2 in a financial statements. b-2. Record the acquisition of the coalreserves and the depletion expense for years Fand 2 in a financial statements model. Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Compute the depletion charge per unit. Deple charge per unit per ton Reg BTXMertz Company purchased land containing an estimated 5 million tons of ore for a cost of $8,800,000. The land without the ore is estimated to be worth $500,000. During its first year of operation, the company mined and sold 750,000 tons of ore. Compute the depletion charge per ton. (Round to two decimal places.) Compute the depletion expense that Mertz should record for the year.
- Salter Mining Company purchased the Northern Tier Mine for $50 million cash. The mine was estimated to contain 6.47 million tons of ore and to have a residual value of $1.5 million.During the first year of mining operations at the Northern Tier Mine, 55,000 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.Salter Mining Company purchased the Northern Tier Mine for $21 million cash. The mine wasestimated 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 weremined, 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 SalterMining Company’s balance sheet after the first year of operations. c. Will the entire amount of depletion computed in part a be deducted from revenue in the deter-mination of income for the year? Explain.Colorado Mining paid $686,000 to acquire a mine with 49,000 tons of coal reserves. The financial statements model shown on the last tab reflects Colorado Mining’s financial condition just prior to purchasing the coal reserves. The company extracted 25,725 tons of coal in year 1 and 22,050 tons in year 2. Required Compute the depletion charge per unit. b-1. Compute the depletion expense for years 1 and 2 in financial statements. b-2. Record the acquisition of the coal reserves and the depletion expense for years 1 and 2 in a financial statements model.