Freeport-McMoRan Copper & Gold Inc., headquartered in Phoenix, Arizona, is one of the worlds largest copper, gold,
Question:
Assume that in February 2015, Freeport-McMoRan paid $800,000 for a mineral deposit in Indonesia. During March, it spent $70,000 in preparing the deposit for exploitation. It was estimated that 1,000,000 total cubic yards could be extracted economically. During 2015, 60,000 cubic yards were extracted. During January 2016, the company spent another $6,000 for additional developmental work that increased the estimated productive capacity of the mineral deposit.
Required:
1. Compute the acquisition cost of the deposit in 2015.
2. Compute depletion for 2015.
3. Compute the net book value of the deposit after payment of the January 2016 developmental costs.
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Related Book For
Financial Accounting
ISBN: 978-0078025556
8th edition
Authors: Robert Libby, Patricia Libby, Daniel Short
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