Question: Prager Inc acquired a mine for 770 000 at the

Prager, Inc., acquired a mine for $ 770,000 at the beginning of the year. Of the total purchase price, $ 100,000 was allocated to the land while the remainder was allocated to the minerals in the mine itself. Prager estimates that 15,400,000 tons of ore are in the mine. During the year, Prager mined 2,500,000 tons of ore and sold 2,000,000 tons. During the year, Prager spent $ 240,000 developing a new process that resulted in a patent. On July 1, Prager obtained the patent, which has a useful life of eight years. The legal and filing fees associated with the patent totaled $ 32,000.
A. Determine the amortization rate per year and depletion rate per ton.
B. What is the amortization expense for the year?
C. What is total depletion for the year?
D. What is the total depletion charged to cost of goods sold for the year?

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  • CreatedMarch 25, 2015
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