Walden Green Company purchased land containing an estimated 4,000,000 tons of ore for $16,000,000. The land will be worth $2,400,000 without the ore after 8 years of active mining. Although the equipment needed for the mining will have a useful life of 20 years, it is not expected to be usable and will have no value after the mining on this site is complete. Compute the depletion charge per ton and the amount of depletion expense for the first year of operation, assuming that 600,000 tons of ore are mined and sold. Also, compute the first-year depreciation on the mining equipment using the production method, assuming a cost of $19,200,000 with no residual value.
Answer to relevant QuestionsSatyam Company has created a new software application for PCs. Its costs during research and development were $500,000. Its costs after the working program was developed were $350,000. Although the company’s copyright may ...On January 13, 2013, Precision Oil Company purchased a drilling truck for $90,000. Precision expects the truck to last five years or 200,000 miles, with an estimated residual value of $15,000 at the end of that time. During ...At the beginning of the fiscal year, David Company purchased for $1,030,000 a patent that applies to the manufacture of a unique tamper-proof lid for medicine bottles. David incurred legal costs of $450,000 in successfully ...Bao Wao Designs Inc. purchased a computerized blueprint printer that will assist in the design and display of plans for factory layouts. The cost of the printer was $22,500, and its expected useful life is four years. The ...Do adjusting entries involving estimated liabilities and accruals ever affect cash flows?
Post your question